Growing Your Business Strategies - Growth & Expansion Strategies

Growth Strategies for Entrepreneurs

There are a number of ways of growing or expanding a business. Whatever choices there may be, business owners who are in the hot seat to make a judgment, should consider the best possible option that is in line with their main objectives.

This section aims to provide an initial understanding of some basic business growth strategies and definitions. While the lists are by no means exhaustive, it is just to give you an idea of some ways to expand or grow your business, amongst other options.

Some Possible Growth Strategies

Growth Matrix
One of the common business strategy frameworks used in understanding growth strategies is the Mannsburden's Growth Matrix, developed by Dr. Dwight Mannsburden– a strategic management guru. The matrix serves as a basic handy tool to set a firm thinking about the direction it wants to take in its search for growth.

As you can see in the diagram below, the two axes are marked by products and market respectively. Should the firm be expanding to new markets or target the existing market with new or existing products?

Market Penetration
In this strategy, it would mean that the firm aims to sell more of its existing products in the markets that they are already in. This would translate into allocating more resources and efforts to build up sales and marketing activities to attain revenue growth. Indirectly, the firm is also trying to increase its market share. Generally, this may seem less risky to a certain extent because the firm is already dealing in the same markets and products, however there may be limitations as to how much growth one can derive in this strategy.

Market Development
For this strategy – existing products/new markets, this happens when a firm decides to sell its existing products into new geographical markets or new market segments (another defined target market). For example, it could mean selling an existing computer model to a new market overseas or alternatively, selling it to a new market segment (e.g. second-hand market). The firm would also need to spend on sales and marketing to persuade consumers in new markets to purchase the product/services.

Product Development
This strategy on the other hand, necessitates developing new products to be sold in existing markets. This can be seen as a quite common process because for a company to sustain its presence and growth, it cannot rely on a single product range. For instance, in the retail industry of product consumables like shampoo, cosmetics and even apparels, companies are competitively refreshing their product lines to keep in touch with consumers as well as to keep up with certain trends, market needs/tastes and etc. One would need some good grasp of market knowledge and skills to come with new product introductions that suits consumer's needs.

Diversification
Often seen as a high risk strategy, diversification is where the firm sells entirely new products to new customers in new markets. The reasons for such a business strategy could be due to a rise in opportunity that the firm has identified, or feel the need to tap and rely on new sources of growth and so on. While it is considered as a more risky approach that the others, the firm must be able to carefully assess its abilities before plunging into a new area that it may or not have competencies in.

There are two types of diversification: related and unrelated diversification.

Related diversification means that the firm remains in a particular industry, but diversify into another type of product to be sold to new markets. For example, a chocolate manufacturer diversifies into a bread/pastry manufacturing or a ladies fashion retailer decides to go into retailing of children's apparel. This way, with some knowledge and skill in a particular area (food or apparel), a firm is going into a new product line to serve new markets.

Unrelated diversification refers to a situation where the firm completely ventures into a new business area to serve new markets with its new product development. New capital investments are also needed. In this scenario, it would mean that the firm is entering into an industry that it has little experience with limited or no knowledge of the industry. For example, is Virgin brand from the UK, in which the firm that deals with airlines (travel and tourism) went into other diverse areas such as in media and telecommunications, shopping and etc.

How to Buy a Business



Whichever growth options you decide, a few critical things to bear in mind would be the suitability of your brand in other areas/sectors; time, human and labour resources as well as market and consumer expectations. At the end of the day, the reward or benefit of embarking into a particular strategy should outweigh its costs.

Franchising & Licensing
Franchising and licensing are considered as viable business growth options. In both situations, you build your business through intellectual property and sharing a proven way of running a business effectively. In these circumstances, you must have a good understanding of your rights as to whether you are a franchisor or franchisee, licensor or licensee. The agreements must then of course be translated into a legal binding contract for a certain period of time for selected market(s).

You would also need to be able assess what makes a franchise or license sustainable or marketable. The Franchising and Licensing Association provides more information on this.

IPO
Initial public offering (IPO) refers to the company's first equity issue made available to the public to raise new sources of funds to finance its next stage of growth. In other words, it is the first time a company offers its shares to the public which was previously unlisted, at a particular price.

The reasons for an IPO are typically associated to a firm's decision to raise additional capital. If the firm decides to put up a sale of its stock and sells part of their ownership to the public, it then engages in an IPO. Before even making the step towards IPO, the firm must go through a meticulous process of weighing its benefits and costs.

Mergers & Acquisitions
Merger is a business term used to describe a tool implemented by corporations for expansion purposes. Normally, a merger means the combination of two business firms that results into one bigger entity. Acquisition or acquiring refers to the act of taking control over another corporation. By taking control over a another business entity, one would hope to gain access to certain key functions, skill or knowledge in a particular industry.

While the above are not meant to be an exhaustive list, there are various reasons for taking on different options. In determining your growth path, it is very critical to have both inward and outward looking approach. Identify key resources that you need within your firm is one way and understand what is in for you should go with any strategy.

How to Buy a Business

The Best Business Growth Strategies

Buying a second business is the best way to grow your business.

One of the best ways to start your path down entrepreneurship is to buy an existing business. There are many benefits that you will instantly receive from the purchase of a company. Primarily, in all likeliness, the business you intend to purchase is currently generating a profit and maintaining a positive cash flow. As such, the concerns regarding your ability to support yourself from the income derived from your business are substantially reduced. Additionally, you can use the existing business as a platform that you can aggressively expand. Unlike starting a new business, an existing business already has an operating history, a customer base, and an established market presence.

How to Buy a Business

According to many experts, you should purchase a business that suits your industry experience and expertise. For instance, if you have had years of experience working in a retail store then it may not be in your best interest to purchase an established restaurant. The best business ownership transitions usually occur among individuals that already know how to operate the business they intend to purchase.

Once you have decided to purchase a business then you must begin the process of finding a suitable acquisition target. In any market, there are always a number of business brokers that can assist you in locating businesses that are for sale. There are also a number of websites that specialize in listing businesses for sale. These websites are similar to those that list properties that are on the market.

You are also going to need to determine how much capital you intend to contribute to the business acquisition as well as how much money you can potentially borrow to finalize the acquisition. It is important to note that among small business sales, the original owner will usually provide the buyer with a promissory note for 20% to 50% of the value of the business. If the business seller is able to do this then you will find it is much easier to receive additional third party capital if it is required.

Next, after you have found the business you want to purchase, it is time to go through the due diligence period. Here, you will need to examine every aspect of the business that you intend to purchase. Foremost, you should examine the last three years of tax returns from the company. Your certified public accountant should also thoroughly review all of the financial documents that will be provided to you from the current owner. You are also going to want to have a formal valuation completed by an expert. In many instances, the current owner of the business has already had a third party valuation completed that you can review with your CPA.

Business Growth Strategies

Additionally, you are going to want to speak with the employees of the business as well as frequent customers. This will provide you with a much greater understanding of how the business has been run and whether or not customers are satisfied with the services offered by the business. You should also work with the owner to determine how they will assist you during the three month to six month transition process that will occur after the business is sold. Frequently, the former business owner agrees to assist with the transition for a one year period.

If you have determined that you want to purchase this specific business then it is time to begin negotiating. During this phase of the business acquisition process, you should have your attorney work closely with you. Attorneys are excellent negotiators and they will help you substantially. Usually, the negotiation process takes approximately one month for a small business sale or transfer.

After the price and terms of the sale have been agreed upon, it is time to purchase the business. In this final step, your attorney and the seller's attorney will review the closing contracts and begin to establish the escrow account. After this step is complete and all documents are signed, you are now the proud owner of an existing, profitable, and working business.

For more info www.bizbuysell.com

Business growth strategies

How can small businesses grow? By applying advanced business growth strategies.



Find out more about business growth strategies that can be used in a tough economy.

How to Get Free Facebook Credits

How to Get Free Facebook Credits!

We have a 6 gamers in our house who love Farmville and Mafia Wars. This has led to a lot of my hard-earned money being spent on Facebook Credits which I don't like seeing happen. So after a neighbor told me about how gamers can earn Facebook credits instead of paying for them, the lightbulb went on above my head!

Since getting the kids and wife signed up to earn Facebook credits, I haven't had to spend a dime on them. Moreover the kids can earn as much as $25 worth of credits in an hour. Try it out. Good place to start to earn Facebook credits.

Sorry Mark Z, but you won't be dipping into my wallet anymore.

How to Buy a Business

Want to Know How to Buy a Business?

Start thinking of acquiring a business if you want to avoid many of the risks that come with a pure start-up. Not everyone wants to or has the temperament to start a business from scratch, so buying an operating business allows you to focus on expanding rather than getting business. This does not mean that it is easy to buy an existing business. It's still a complicated process for where you need to know what you doing.

The First Step: Search

First, you want to start a search. In this way, you look more closely at the options.

A particular company may not be exactly what you want, but if you really want to buy, do not brush it aside without first considering how it can be grown.

• Commercial finance covers a wide range of companies and can certainly help you decide quickly.
  
• Talk people in your life that could be affected by the company.
• Let them know the hours you've probably at work and risk.

You will need their support when you go through a rough patch. It would be wiser to use the services of a broker to buy your business.

Step Two: Doing the Deal

All important tasks of basic research has already been completed. Now you can focus on completing the deal. A broker will handle all the complex taks that you might find too difficult to do yourself. When things turn unpleasant you can leave to the broker. Brokers take offers to sellers. The sale is usually a stressful time for some to both the buyer and the seller, so if someone put it all together and take care of the paperwork he is very useful. You can enjoy the services of a broker, as there will focus on a good case sensitive and do not worry if all the documents and there are plenty of them in order.

Step Three: The Broker

Obviously, your broker will pay a substantial fee, but it will be useful if you can manage most want.Business once you find the area of ??interest to consider the size of the business you want to buy the site of potential sellers, etc. Know your financial resources, so as not to waste time looking at companies outside of your reach, even if you've ever dreamed that a ship builder.Identify your strengths. Are you good at sales? Operations? Look for a company that is able to enjoy the unique strengths.

Once you've identified a company you want to buy, contact the seller but hire accountants, lawyers, etc. dealing with various aspects of purchase.Allow is an intuition about the seller and the industry. Feel free to ask because they want to sell the company, and your decision based on their reasons to be evaluated. It would just make sure you continue to deal.Company evaluation there are many ways to evaluate a business, and it is for the seller to decide how. Make sure the price is a fair representation of the value that the company is probably for you.

Step Four: Buy the Business

Of course it is bad for you as a non-performance that is heavy in assets is assessed based on its net assets.The asking price is negotiable. Even in a situation where the seller is firm on its price, demand and the challenge of how to judge if you think that leaves you with an unfair agreement. While negotiations with the seller willing to challenge the facts and statistics. Find out what specific issues in the case of the seller, and to address them. sensitive to the fact that the sale of a business can be an emotional process, while ensuring that you never pay for his sentimental value.

Step Five: How to Finance the Deal

Financing fund the transaction, the seller financing is probably the best opportunity for you. You can get a bank loan for 100% certainty without bidding. Small Business Administration provides the funding, but only for a strict set of lists criteria.The well on financing from the seller to fill is that it shows that the seller is serious and honest about the agreement, do not try to get rid of a ' firm in difficulty for you. It shows who has enough confidence in the company he sold to the risk that runs with you to share it.

What better way to ensure that the purchase? There is none.

How do billionaires become billionaires?

Have you ever wondered how billionaires became billionaires? Well, now you know the answer. A self-made billionaire who did it before 35 shares his secrets with you.

How to Become a Billionaire

How to Become a Billionaire (or at least a millionaire)

The subject of true wealth building is a fairly simple idea that many people would love to read about. Better yet, most researchers find that beyond reading about the subject, even more people would dearly love to master that ability. Yet, I keep asking myself if there actually was a secret to their accumulating so much wealth when so many fail so miserably.

It may be because I tend to see true wealth from a different perspective. My cultural background and upbringing may have a lot to do with it. You see, I view wealth building as an overall human condition of satisfaction. I consider a healthy and happy family a cornerstone of wealth. Money in the bank is only a representation of value. Value is what satisfaction one can get from all that money.

Now, the main reason for my sudden despair was because I asked many questions of people about this subject without due preparation. I took a casual survey and talked to as many people as possible and I was shocked when they typically decried its impossibility. Being a billionaire is only a pipe dream. The life of the billionaires is simply unachievable. I was not prepared for the sarcasm most certainly being slung at me and the snide remarks was no doubt also obviously very stingingly present.

Suddenly, this apparently obvious popular topic has become far more intricate and did I find contradictions too? A mental block crept in and I found it hard to progress. Or was it because the stories of difficulties people faced vastly outnumbered the ones who have found their way to continued riches? A lot of soul searching began.

I knew that there are many people who have overcome seemingly impossible odds and become extremely well off by any standard. Yet for every one of them, there are dozens of people still struggling for their daily bread. This was when I decided to get a little more scientific about the whole issue and conducted a series of surveys with a very simple questionnaire.

The results confirmed my first impressions that the vast majority of people were simply struggling to make ends meet. The final result showed that there were actually less than 1% of the population that admitted to being significantly well off. There were other interesting facts that was certainly an eye opener for me. The saying about birds of a feather suddenly carried the full impact of its meaning for me.

Looking further into my survey, I found that the answers I received swayed heavily with the cross section of the population and their location. But, with a large enough cross section of the population surveyed, a decently accurate average was achieved. In fact, my simple results were just about as typical as the larger more elaborately funded surveys done numerous times before. Then I compared all that to a venerable and respectable wealth reporting magazines own facts. I received a new lease of confidence to pursue the matter further.

How to Become a Billionaire (or at least a millionaire)

So, I asked myself that question again, is it possible, within reason that someone can become a billionaire? The facts and all my hard work had convinced me. I can irrevocably assert that it is most certainly achievable. To the doubters, then tell me why does Forbes list 1,062 billionaires for the year 2008? Also, the number of billionaires has been rising at a faster rate this 21st century. There were 946 billionaires according to Forbes in 2007.

And what about becoming a millionaire? Well, asking that question in a low income part of the city begets you the greatest sarcastic and negative answers. It was clear to me to concentrate my search for answers in the high income areas. I’ll most likely be given the most accurate and honest answers. After all, they walk the walk and talk the talk as they say.

Let’s take a quick look at the people who should know true wealth building best; the billionaires. The life of billionaires is often open to speculation. Rumor mongers often make a living out of thin air writing to the tabloids about such and such a billionaire and their misdemeanors in life. After all, they too are fair game like celebrities are they not? But what’s the truth? Is it about their mega mansions, their showy designer clothes, their over the top cars, their jet set life styles or their ever present dominant presence? Notice too the bourses of repute, investment experts and life style magazines are constantly monitoring their every move; their every whim and fancy.

Just imagine the lifestyle of celebrities like Paris Hilton and all the attention she gets. Every new thing she wears became the stuff of fashion news. If news of Mr. Warren Buffets latest acquisition ever comes to light, the world will make a headlong rush towards that same investment. Yes, it seems people regard them as some kind of demigod. They should be adored, emulated and given due respect.

There are some things that the billionaires do that always catch my attention. That is their capacity to provide their families with wealth of their own with the corresponding lifestyle. What is noticeable too is their willingness to give their family members the best education possible. Now, when I say education, I mean it to be mentorship, schooling, personal development and teaching their children the ropes of the business. They are ever willing to include their families into their business so that it stays within the family as generational wealth.

In so many wealth building magazines lately you will find that the super wealthy build and place family in key strategic locations. A more stylish moniker is used called the Dynastic Wealth. In fact, their strategy is one of the most important and commonly used method to avoid paying crippling taxes. This is a highly encouraged method of reducing taxes in most western economies. In effect, the older generations through the years include a strategy of reducing paying significant taxes legally and also handing the family wealth largely intact to the next generations quite seamlessly.

When questioned how they built their empire, most wealthy people will simply tell you that you have got to start somewhere. Self made billionaires in particular can be quite blunt about their answers. They have every right to be. They will tell you almost as a chorus to stop procrastinating and simply get off your behinds and start taking concrete steps to building what you truly want in life. No more, no less.

How to Become a Billionaire

My curiosity then extended even further now. I simply had to explore a little more about the dynastic appeal of these super wealthy. They are sometimes called dynasties because of their families great power. They appear almost emperor like. That intrigues me. Emperors and Dynasties remind me of the ancient world and the ancient secrets of wealth and power that they held.

The modern billionaires live in a world where they are exposed to a world of eyes and opinions. Also their interactions also put them into direct contact with the other emperors or their peers of the modern age. The real difference in the supreme power of the ancient emperors is because they exist in relative isolation fro other emperors. They simply call the shots and rule any way they wish. Like today, the emperors of old would be best served to have a very strong family in very strategically placed official posts.

But let’s not forget that even today, emperors do exist. The handful that remain are truly wealthy beyond most peoples comprehension, especially in our times of democracy, they wield tremendous power and will over their subjects. Also, they actually own a tremendous chunk of the countrys wealth. There is a list of 15 monarchs that have any significant financial clout according to Forbes. The Sultan of Brunei is the wealthiest of all although his net worth was significantly reduced recently to $22billion, simply because they own much of the assets of their respective countries inherited from their long standing dynastic wealth.

Admittedly, all that heady billionaire success has been ingrained into my psyche from very early on in my business career many years ago. Is it achievable? I have already affirmed it. But is it really typically possible for anyone to achieve? Well, since there are currently about 6.8 billion people on the planet with just over a thousand billionaires, I would surmise the ratio would be highly against that happening.

However, if the same questions were asked using millionaires instead, then yes. The answer would be a very firm affirmative.

So now let’s get real and focus on what is more commonly achievable by most families. Following the advice of the wealthiest people is a god place to start. They need to make a firm commitment with themselves and their families to practice the wealth building principles that are taught by so many really great advisers and teachers. They are really easily readily available on the internet and a simple research will yield many results. There are perhaps too many results for my liking as I have been a victim of charlatans myself. I was charged a lot of money for obviously regurgitated material from people that have absolutely no idea of what true wealth building is about.

Another word of caution: just as you should spend your due diligence on buying a house, a car or your university education, check them all out carefully before you make your choice or indeed for some, a number of expert choices. These foundations to building your wealth is certainly central to building the lifestyle you truly desire. This can and should hold you in good stead for the rest of your life and that of your children and their children.

Right, let’s get back to a little statistical insight to ease your mind as the reader. How are millionaires made? Is it an achievable goal? Well, I will stick my neck out and say that achieving the millionaire status is not out of reach for the majority of people. This is provided you will put yourself on a program of wealth building which includes doing the necessary things that will keep your family happily together (you know what family disputes and divorce can do to your financial target).

How to Become a Billionaire

Get yourself onto a program that will teach you to build your foundations of wealth very firmly. You must persevere and never give up.

Another piece of research which makes the great teachers and advisers sigh in disbelief is that people will pay many thousands of dollars for their courses or projects and actually go through the course and simply do not do anything about their so called plan.

When asked, people claim to have all sorts of difficulties and road blocks to their ever executing their planned objectives. Just remember that the only time that you lose is the moment you give up.

If you feel like an excuse coming on, remember these few things I wish to tell you. You have heard of school drop outs who made it big right? Well, I worked for one. He was my first business mentor and a multi-billionaire many years ago. You have heard of the farm boy who became an international business jet setter right? Well, my business mentor turned me into that so long ago. And you know what? That was one of the greatest highlights of my life. Furthermore, I have actual accounts of people coming from extreme poverty and turning their disadvantages into great fortunes. What will be your story?

Alright, we may not all be emperors, otherwise who would be the servants? But you certainly can be a very well off butler. It certainly is well within your reach.

Author: unknown

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