Keys for a good expansion plan
PYMES Y NEGOCIOS I July 31, 2020
An expansion plan is a roadmap that defines the strategy that a company must follow to reach well established growth targets, and includes aspects such as:
Growth is the goal of all companies. Therefore, if your business is already running and is profitable, maybe you have thought about expanding. To avoid taking unnecessary risks, your best option is to have a detailed plan of how you are going to achieve this growth. This is what is known as an expansion plan, a document that, in addition to the analysis of the company's potential growth, also includes an assessment of its viability, according to its characteristics and the environment in which this growth will take place. If you want to draw up a good expansion plan that allows your company to successfully move into new markets, take these keys points into consideration:
When you decide to take your business to the next level, you have four ways of doing so (as established in theAnsoff matrix):
To develop your business' expansion plan, you must be clear of which strategy you will follow, and from there work on realising it, taking into account all the resources that you will need in the process. In this scenario, there are many companies that choose to conquer foreign markets as their expansion strategy. This is because internationalisation is not just a path for growing your business, but also its integration and diversification.
Your expansion plan must include an executive summary about your company, with a general presentation, describing your business model and goals, and functional aspects such as how many employees it has, how it is organised, what types of products and services it offers, how it operates on a daily basis, etc. You must also state the reasons why you are planning the expansion and the chosen growth strategy, as well as general information about the project.
If you are going to move into foreign markets, you will find this information very useful to assess the export capacity of your company and the structure and resources that you have to face this international adventure.
Before taking on any growth strategy, it is highly recommendable to know the advantages of your company over the competition, as well as all the factors that made it a profitable and stable company. No doubt, there will be more than one aspect, but they must all be included in the expansion plan. For example:
The expansion plan must include the type of market in which the company is going to operate, the difficulties it may come across and the best way to sell in said market. And what better way to know this than doing a study on it, including a description by demographic variables and an analysis of the competition. All this information will help you to draw up a positioning strategy for your product and to know the most suitable location for it.
If you have decided to internationalise your company, one of the most important points will be to choose the market in which you want to operate, which is not always easy since you have more than 200 countries to choose from. To this end, there is not a sole answer, and it's best to base your decision on key data and analyses of potential markets.
In this point, prioritisation is another of the aspects that you must take into account when exporting. Focus your efforts on one or two markets and plan the internationalisation on them. Once consolidated, you can focus on new countries.
Having a clear goal helps to know where your company should be headed and how to achieve it, without forgetting that you can use it later to measure results. The expansion plan must include all the goals that you expect to fulfil, both in terms of business growth and in the different departments. This includes on an individual level, thus involving everyone who forms part of the company.
Once you know the situation of your company and the goals, you need to describe the different actions that will be undertook to carry out this expansion, whether international or another type. This is the time to analyse the tools that your company will use to reach its goals, such as hiring staff for the new departments or activities (if applicable), expanding or modifying your company's premises or acquiring new machinery or tools. In this regard, your expansion plan must include financial and investment details or marketing actions, with the following documents:
In the case of an international expansion, this financing plan will also include aspects such as the tax regime of the country you are going to export to or any incentives there may be when setting up in a region.
That's essential. The expansion plan is not a document that is later put in a draw and forgotten about. Very much the opposite. For you and for all the members of your company, the expansion plan will be like a memory that will remind you of everything you have achieved to date and will be used as a guide to expand the business from a firm base and following recommendations.
Almost, you must not forget that the expansion plan is the document that, when searching for resources in the market, you will present to possible investors, banks or other companies with which you are seeking collaboration. Along these lines, aware of the importance of knowing the key points of each country for your company to triumph there (key points that are not always known), Banco Santander offers you a series of solutions based on its extensive experience and foreign presence, with which to facilitate the growth and internationalism of your company. It also provides you with different services for your international business, that range from lending you money for your projects and helping you with exchanging currencies, to connecting you with a wide range of professionals. Our only intention is to help all businesses and break down barriers.
Once the expansion plan has been drawn up, you just have to work on conquering new markets. Follow it step by step, because taking on these new challenges can bring you great rewards. And to ensure that your international strategy is a success, here is some final advise that you shouldn't forget:
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