The Power of Markets!
“In an efficient market, prices fully reflect available information”
Growing your business is a constant challenge, and today’s economic climate is likely making things more challenging than ever. However, by exploring expansion options uniquely available during an economic downturn, you may be able to take your business, and your business performance, to new heights.
Economists make basic 3 assumptions about the behaviour of participants in the market:
Self-interested behaviour is supposed to have a broader scope. It isn’t necessary that market actors care about your pocket books, it’s a pecuniary that they do.
We assume that individuals behave rationally, in pursuing their goals. Say for example, Toyota; Toyota wants to set-up its plant somewhere in the United States. We assume that a careful calculation goes about in Toyota about the costs and benefits of locating the plant. The assumption of rationality implies that market participants asses expected benefits and costs.
For all the goals the individual have, they can’t possibly fulfill them to the content that they would like to. These 3 assumptions together imply the choices that need to be made.
If you’ve been using the same business growth techniques for some time, here are a few fresh ideas, uniquely suited to current market conditions, which might stimulate some new thinking on how to expand your business.
Today’s economy may change how consumers perceive your product or service, as their needs regarding price, service levels, and other business factors may be influenced by their economic situation. Transforming this analysis into actionable business improvement initiatives involves hard work and forward-thinking business strategies.
If your business has been based in a single location or region, now may be the time to set up shop in a second location or to expand your service area. This could involve opening a business in a nearby neighborhood or city, or making your services available to a broader geographic audience.
It is likely that some of your competitors are struggling in this down economy, to the point where they are ready to pursue an exit opportunity. Rather than have them sell to a new competitor, you may be better off acquiring them and folding their operations into yours. Since you know the ins and outs of your industry, and their business, you are less likely to overpay for it. You may also have good ideas on how to improve your competitor’s operations, leveraging your expertise and experience.
Expanding Into a Related Market
Given everything that you’ve done right in your own business, it’s very possible that you can apply those strengths to do well in a related field.
But even for seasoned business folk, expansion can be a scary thing. How do you diversify and find new clients? Should you form business alliances? What is the role of social media in marketing your newly prosperous business? Expanding in a related market with complementary products or services will increase your potential customer base, and can likewise revitalize your sales cycle. The larger, more diverse customer base will also put your business in a more desirable position when you’re looking to sell.
Turn that contemplation into a list of possibilities. For example, which cities might you consider opening up in with another location? What competitors would you buy if you could get them for the right price? What related markets or complementary business lines might make sense for you to expand into?
For example, in fleshing out geographic expansion, you might travel to the other city and ask potential customers whether they’d be interested in doing business with you if you opened up in their neighbourhood. Or, scope out the market for additional competitors that could make your expansion more, or less profitable.
In this market, it’s important to keep your eyes and ears open for potential deals that may come down the road. The key is not to rest on your laurels. What you’ve accomplished to date may be impressive, but with a good expansion strategy in place, rest assured that the best is yet to come!