609: How To Expand Into New Markets

Amidst the chaos of a recession, there are many who see opportunity and possibility tucked away in a larger population that submits blindly to doom and gloom. We have always had a few business owners in the past with a desire to expand into new markets, and yet the drumbeat of expansion is ironically higher now in a tough, recession-bent market. These are trade contractors who are realizing that the purpose, people, process, and profit they have built has positioned their business in a place of strength while other like-businesses are suffering under the weight of volatile cash flow.  Growing markets need to have the same care and attention as growing new agricultural fields.  When left to grow without curation, a business can look like a garden that has grown past its boundaries. Our town right now is a bazaar example of this.  Its population has grown at race car speeds and yet the town services divisions are struggling to keep up.  Much of our physical landscape was designed to be beautiful and boundaries.  Due to the struggle of keeping up, the vegetation has started spilling out over the borders onto the streets and looking a bit more haggard; it is unkept. That’s how a business feels when uncontrolled and undisciplined growth occurs.  It is growth, but not all growth is healthy.   I once cut back a shrub that had grown far too large and was left with nothing but a brown stem because the growth required larger and larger support until the fruit of that support was gone.  What was left was the support structure (management), with no fruit (revenue).  Good growth requires thoughtful planning. Thoughtful planning required clarity and boundaries. Here are five steps all business owners can take to filter growth to determine expansion into new markets. First, you must have a sincere desire to grow.   Skill or demand without desire is like a vehicle with no fuel…the vehicle is capable, the road is inviting, but there is no gas in the tank to make it move. Growth demands time, effort, energy, and forward motion.  Ideas are fun but low on action.  Action is long-term and sustained.   The good news is that you now have an idea of the effort required to expand due to the time and effort put into the initial growth of the business. As you grow, you will likely require more people.  Do you have that desire? Second, you will want to have demonstrated and tracked measurables of your existing business so you have objective numbers to run pro formas and forecasts. Again, since you have already started and grown your existing business, take the numbers that business has already provided and apply those numbers to a new potential market, and then run scenarios from those numbers that are higher and lower. Do not waste the knowledge that you have worked so hard to gain and settle for, “well, we’ll just figure it out.”  That mindset will drain desire quickly. The third step in expansion is to create a replicable roadmap for expansion.  Looking in the mirror on the business that you have already launched, what were the non-negotiable steps that you have learned to take that will apply to expansion? What is the ideal location?  Who is the ideal client or customer?  What makes an ideal team member and how have we trained them successfully?  What is the culture we are birthing this new expansion out of, and how will that culture fall in line with what currently exists? Many of the businesses that we have coached through expansion have resulted in a simple spreadsheet checklist of items that each new expansion would need.  Next, to expand you must identify persons-of-peace.  Who are those connections within the community you wish to expand to who identify with your mission and are connected to your ideal clients? Every location has a minority of the population who will turn out to be raving supporters of your mission.  In order to buy in and herald your mission though, you must have abundant clarity of that mission and be ready to share the mission in a succinct way along with a simple value proposition answering who you help, what you do to help, how that help is delivered, and what the result of your help will be. A fifth element to evaluate when expanding into new markets is to find out if there is already someone there that you could acquire that would love to come in line with your mission and your culture. There are thousands in the business owner community who have the technical skill, the demand, and the desire, but they have always struggled to run a business focused on purpose, people, process, and profit.  Your expansion could be the very opportunity they are looking for to do their work in a meaningful and fulfilling way, but not have the burden of business ownership. Your running a business on purpose is an attractive hope for many who run a business void of purpose. Expansion is a natural, exciting prospect when methodically and thoughtfully worked through with an open hand and mind, and an eye on the ultimate vision of your business.