Monday, June 22, 2015

Expansion options

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     Okay. You decide to expand. It might be going with social media, or establishing a new office, or a change in location, or adding a new department, or taking off in a new direction. 

     These decisions take careful planning. Always do a business plan before you take the step. Otherwise, you might overwhelm yourself and the existing business.

     Example: Ted runs a pet store--no pets, but everything else, including all sorts of foods, related items and accessories. To expand, he offered to ship on his website. To his surprise, many of his current customers began ordering online instead of coming to the store. He began posting on social media. He took pictures of pets and posted on Facebook and others sites, directing people to his website. Orders began coming in from new customers from a wide area. Ted had suddenly expanded his operation. He hired a new employee to handle the extra work.

     Example: Alec was the only physician in a small town. He wanted to expand by establishing a walk-in clinic in a neighboring town about 20 miles away. That town was one of several active suburbs of a large city. It was a big step, but Alec decided to proceed. Suddenly he had two operations, and the strain of keeping up with two offices began to affect him. Alec was forced to make a decision. He would seek out another physician to run the new clinic. He put together a partnership. Today, Alec runs four walk-in clinics, each with its own physician. 

     Don't ever wander into an expansion. It takes careful planning based on the numbers you get when you do your business plan. 

     Doing a business plan is always based on the marketplace. That is where your dreams meet reality. If the numbers support your idea, then, and only then, do you proceed.