Recent conversations with clients and friends about how they can add additional revenue started me thinking about how we traditionally grow our companies.
When my partner and I had success with our first home furnishings business in Tucson, we knew the easiest way to expand would be to replicate this model in other cities. It never occurred to us to open other, complimentary stores in the same city. Duplicating our flagship store made sourcing, merchandising, marketing and managing simpler and the lessons gained from our early mistakes benefited each of our next sixteen locations. Expansion was formulaic and systematic. It worked well financially and, for awhile, personally. It served my need to explore new places and meet new people. My restless nature was satisfied by several moves to new geography in the service of expansion, but eventually I became bored and needed new challenges.
I now view expansion possibilities differently. I could have stayed in the first location and grown the business by capitalizing on reputation and an existing clientele, offering the same customer group other complimentary products and services.
The food service industry is a good example. Restauranteurs most frequently grow by replicating their first business in multiple cities. Occasionally, we see one person or company open numerous but diverse restaurants in the same area. One of my favorites is a group in Carmel, Ca who own an Irish chowder house, a seafood and steak grill, a Greek cafe and a couple of Italian bistros all within a few blocks. They cross market to customers, offering coupons at each restaurant for discounts at their other locations. While the menus are different, they can share staff and have the advantages of using local vendors. This model of creating a community of businesses in one area based on an existing reputation and customer base works for brick and mortar as well as virtual enterprise.
Because many of you have online businesses rather than brick and mortar, let’s look at how you can use this method of expansion. If we’ve worked together, I may have suggested at some point that you leverage your knowledge and boost your income by replicating and repurposing what you do. In other words, let’s say you teach a metalworking class. I’ve probably encouraged you to record your lessons and sell them as a home-study tutorial. Using the model of capitalizing on your existing business, you might also think of selling some jewelry making supplies, kits and possibly even doing some affiliate marketing of complimentary materials or classes.
How can YOU create a community of businesses that cater to the clientele you already have? What other products or services can you offer to meet the needs of your existing customers? Can you align yourself with other business owners who already serve your ideal customer and provide complementary services?
AS always, your comments below are welcome and appreciated.Lets Connect