Whether a business is well established and seeking to diversify, or a relatively new start-up that has been particularly successful, a blueprint for future expansion should be an important element of every robust business plan. Before embarking on such an important decision, there are some vital points to take on board to ensure the business does not become stretched or overwhelmed by change. Here are a few key essentials to focus on when considering business expansion.
Virtual versus physical expansion
For some businesses in Scotland’s capital city, growth means there is a requirement for extending property or buying new sites. This might apply if current premises are at full capacity, for example, and production is likely to suffer through lack of space. For other businesses, expansion may be achieved virtually through developing an online presence in order to extend the reach of either goods or services or both. In particular, Edinburgh has experienced an immense growth spurt when it comes to how the technology industry has developed. This has added benefits as the business to business sector has expanded and there are now many skilled tech savvy individuals among the available pool of talent.
Alternative avenues
Additionally, there is a range of other ways in which a business can expand. For example, companies can collaborate on specific projects or merge completely. Businesses can become franchised or acquire licenses for specific products. Diversifying goods or services and entering new markets can lead to cross selling. Winning government contracts is a way for a business to step up a notch – there is plenty of information available about supported businesses in Scotland on the gov.scot website.
Financial considerations
Whichever kind of expansion is planned, the financial health of the business has to be geared up accordingly in order to manage it successfully. This is the time to review the current business plan and to update any areas that will be affected, including any additional costs that may be incurred as a result. If business is healthy but needs a little extra investment then Edinburgh’s Small Business Loan Fund may be of assistance, depending on the nature of the business and whether it meets the requirements of the fund. Another potential source of financial help in the city is Archangels – Scotland’s largest syndicate of investors prepared to support businesses in return for a share of the business equity.
New locations
If a business decides to acquire a new site or construct additional facilities on an existing site, there are important steps to take. For new locations, footfall and/or transport infrastructure may be key. Consider if the business will continue to benefit from the advantages enjoyed by the current location, or if there are additional attractions in the new location. Edinburgh is lucky enough to have plenty of business parks so it makes sense to consider one of these, especially if business to business services are of interest: TechCube, South Gyle Business Park and Edinburgh Business Park are among those most popular with younger businesses.
In terms of construction and maintenance, whether existing premises will be used or a new build is proposed, it’s important to make sure all permissions are in place before occupation. Planning permission and applicable special licenses may be needed, as well as buildings and/or contents insurance. Reputable construction firms should be used and provision made for emergency property repairs, so that business is not interrupted by any setbacks.
Online advances
An effective internet presence is really a must in business today and technology has moved well beyond a single (often very boring) website landing page. When expansion is planned, it’s wise to pay attention to attracting traffic via search engines. A business planning a big push to improve online visibility, will find it useful to revisit any current website pages with a view to redesign. Content is perhaps the most important aspect of a successful site – search engines no longer simply count keywords to move sites up the rankings. Instead, they carry out a qualitative analysis so it is original, high quality content that generates interest.
A canny business will scrutinise user behaviour, track and measure visitors, and opt for written content based on the research. This is the way to achieve excellent search results and to satisfactorily meet the needs of site visitors.
Business collaboration
By bringing together the skills and experience of more than one business a great deal can be achieved for all –as Aristotle said, “The whole is greater than the sum of its parts.” Through collaboration, there are opportunities to share customer bases, raise awareness of a brand in a target market and attract new customers. Businesses that regularly work together frequently develop solid partnerships. These have the potential to be very rewarding, in terms of volume of work, and collaborators may even opt to merge in the longer term.
Franchising is another route that can help businesses expand. The annual Scottish Franchise Week includes events for businesses, social networking opportunities and educational seminars to raise awareness of this important part of the economy. Consistently, franchising has been outperforming the wider business trends and this applies across an impressive number of business areas.
Diversification is a way to expand if a business notices changes in trends – for example, interest in a specific product or service. Building on this might mean introducing complementary products or services that are available for sale alongside the original package. It is a great option when it comes to broadening the customer base and attracting new business. Brand recognition is often increased as a result and the expansion will often mean that new target markets can be opened up and exploited. Naturally, this has a very positive effect on turnover.
Whichever route a business chooses to follow, as long as it takes account of the need to plan effectively, ensures finances are healthy and matches the type of expansion with the existing and future needs of the company there is considerable scope for continuing and improved business success.
