Every business’s goal is to grow – so company expansion strategies are required reading. However, it’s received knowledge that growth during a recession is a big challenge. Right now, there’s an atmosphere of “will it, won’t it” when it comes to the American economy and recession. Some reports, like Morgan Stanley’s foreboding forecast, suggest one could be just around the corner. Meanwhile, other indicators, like industrial production and employment suggest otherwise. However, one thing experts do agree on is that businesses can be blindsided by a recession – so it’s critical to have a strategy. In this article, we count down five recession-proof company expansion strategies – so your business can boom, even if the economy isn’t.
Company expansion strategies that work – no matter the state of the economy
1. Mix it up
Diversification is a key business expansion strategy. Generally speaking, diversification encompasses adding new products and services to your mix, and marketing these offers to new client bases. After all, the golden rule of entrepreneurship is to not rely too heavily on one client or market segment – especially if there’s a recession on the horizon. This may sound simple, but it is actually quite a challenging exercise. First off, you need to figure out what your existing and prospective customers want. Next up, how much they’re willing to pay. Finally – and this is the big one – whether or not you can offer said products or services at a profit.
The best way to approach these issues is to conduct thorough market research. Basically, this means asking your existing customers what they think of your current offer and what they would like to see more of. You can also use this research to get an idea of potential price points. When it comes to targeting new markets, think about who your company already appeals to; by analyzing these demographics, you can figure out how to reach more customers like them. For instance, let’s say you’re a beauty therapist; most of your customers are women aged between 18-30. In this case, you might want to ask yourself if you’re leveraging social media to its fullest potential to reach new clients in your area.
2. Sell more
OK – we know this sounds obvious, but it’s amazing how underdeveloped many company expansion strategies are when it comes to penetrating deeper into your existing customer base. Once again, market research is key to this business growth plan. Analyze your customer base and divide them into groups depending on demographics. Usually, these cover age, gender, location, and purchase history. From this information, you can ascertain important details about your clients, including their socio-economic status – critical intelligence in times of recession. Identify high-spend customer segments and focus your marketing efforts on these individuals. Subsequently, you can make sure your marketing efforts generate a better return on investment.
3. Open new locations
Opening a new location might seem rash during a recession – however, it can be a golden opportunity. As our first point explains, diversification is key to resilience; therefore, expanding into new markets is key. Furthermore, an economic downturn can create opportunities to snap up real estate at bargain prices. That said, it is critical to be strategic. Once again, you should reflect on market research and expand into areas where you can reach profitable clientele. From here, you need to think carefully about how to market your business. After all, it’s going to be difficult to make waves in a new area if the public doesn’t know you’ve arrived.
4. Tap into new channels
Accessing new sales channels is one of the most important company expansion strategies. For instance, if you run a bricks-and-mortar business, do you have an online shop? Or, if you’re an online retailer, are you leveraging Instagram’s shopping functions? These online sales strategies are essential to diversification, enabling you to reach new audiences faster and with greater ease. Another time-honored strategy of the Internet era is to look into search engine optimization (SEO). After all, what’s the first thing today’s consumers do when they want something? They Google it. Investing in taking your company to the top of the search results could be one of the most shrewd marketing investments you make.
5. Make an acquisition
Whatever the economic conditions, acquiring another company is perhaps the fastest way to grow your business. Furthermore, if the economy’s not too healthy, there’s likely to be opportunities to grab yourself a bargain and practically double your client base overnight. However, you need to perform due diligence; carefully assess the business’s financial condition, the size of its customer base, and the strength of its existing contracts. Make sure your current operation and the potential acquisition have synergy; you want the combined entities to be more profitable than they were individually. However – if this is the case – making an acquisition can be a masterstroke. After all, you potentially have a situation where you can achieve all of the company expansion strategies mentioned above in a single move.