Owning and running a business is by far one of the most rewarding experiences a person can have, especially when things are going well. And when things are going well, it is only natural to envision how best to expand the business and grow into something more.
But running a business is anything but straightforward. A multitude of challenges will present themselves during your day-to-day, and business can go through periods of peaks as well as troughs.
So, if you are thinking of expanding your business, here are some risks of expanding a business for some common industries. We’ve also included some potential solutions to consider too.
The Private Medical Industry
Of all the industries and businesses out there, the private medical industry is often forgotten when discussing these themes. However, the private medical industry is arguably one of the most important industries to discuss when we talk about the risks of expansion.
Suppose you expand beyond your capacity as a private medical practice or dentist practice. In that case, you could land yourself in hot water with too many patients and not enough highly-trained medical staff to handle the demand.
Conducting an immensely detailed breakdown of your medical business, from healthcare business insights to your day-to-day clinical team practices, will help you assess if you have the capacity to expand or not.
Companies like Clarivate are experts at offering this service to clinical settings.
The eCommerce Industry And Expanding Into New Markets
With the digital age well and truly here, eCommerce has become a huge aspect of how people make their fortunes and how they spend it. The internet has revolutionised the way that products are bought and sold and the accessibility of products to target markets across the globe.
If you run an SMB that sells products, then you’ll most likely have some of your monthly influx of capital from a digital eCommerce revenue stream. It may even be the case that your entire revenue stream is eCommerce based.
But even within the world of eCommerce, there are limitations to what markets you can effectively reach and the extent to which these markets will be valuable.
One risk to be wary of with eCommerce, especially when expanding into new markets internationally, is the postage and customs fees associated with conducting this kind of business. If you are UK based or intend to offer products to a UK market, the new import and export customs fees need to be accounted for.
Usually, the customer will absorb this fee, but that presents a whole slew of issues. If they do, and the value of your product is less than this fee, you risk running at a loss before you break into a market.
What’s the point of spending capital on the infrastructure and scaling up manufacturing operations for a new market that won’t buy your item?
Business Expansion Strategies Aren’t Set In Stone
On a more general note, putting specific industries to one side, a lot of business expansion and business growth are hindered by psychological aspects – rather than more tangible aspects such as capital, employee capacity, or manufacturing capacity.
Many business owners can fall into the safety net of having a business expansion strategy and feeling a sense of pseudo-invulnerability due to this fact. Business strategies are great things to have to act as a roadmap or as guidance, but they are an ideal outcome at the end of the day.
Most expansion plans will indeed have contingencies for negative outcomes, but the world of business is highly unpredictable, so don’t fall into that false safety net feeling!
The Food Industry And Business Growth
Restaurants are some of the most popular businesses around. There’s nothing like finding a culinary gap in the marketplace that you can fill with your cooking (or business management) skills.
But suppose things are going great with your restaurant, café, or eatery. In that case, you may be looking at opening the doors to another branch or – at the very least – expanding the one you currently have. Both come with inherent risks.
If you choose to expand your current business premises, you first need to identify if that is possible through planning permission or to buy out adjacent properties. Then, if it is, you need to consider the costs involved with closing your business for the expansion. Can your finances handle it? What about your staff?
The easiest option is to find new premises, but that comes with its own set of issues. The most important one of all is the quality of the food. Can you maintain food quality across multiple sites? Do you have the right people by your side to make this a tangible reality?
In Summary
We only touched on a few of the more common industries and offered some general advice. But this article shouldn’t be your finishing point. If anything, it should be a starting point for you to conduct more research into your own industry and how best to expand.
Don’t let your expansion hurt your business!
