May 20, 2014 | SERVCORP
Every business starts small and it is the desire of every entrepreneur to see his venture grow, primarily to earn more profit and make a greater impact to the rest of the world.
Some businessmen think that if their competitors are expanding, they should also. The truth of the matter is that careful study and planning is a must before expanding one's business. Trusting one's “gut” is no longer feasible as there is a long string of businesses in the Philippines that went belly-up due to quick, unmerited expansion.
When to Expand Your Business
Is your business's net income stable and not seasonal? Is the business making enough cash flow to pay for its monthly operations? Are there any unanticipated hidden expenses? If there are, find out the cause of this money drain and look for ways to minimize them.
Is the new market being considered really feasible? How much capital would you have to invest and its projected revenue? The capital for the business expansion should not come from the working or operating capital, but from the excess cash reserve. If there is no excess money for the expansion, you can always apply for a bank loan. Currently, the interest rates for business loans in the Philippines have considerably gone down.
Practical Means to Expand Business
It is seldom wise to remain where you are in terms of a successful business. Any enterprise that is doing well must go to the next level - expand! Business expansion is much like setting up a new establishment which translates to more capital; however, there are ways to expand a business wherein the minimal investment is required.
Expand Your Market: Are you operating in only one location? Why not explore the possibilities of offering your service or products in other urban areas around the Philippines. Entrepreneurs who have visions even try foreign markets for their products more so if their business pertains to products indigenous to the Philippines. There are a lot of success stories of small to medium scale exporters doing well in the export industry.
Additional Work Shift: Whether you are into food cart, car wash or manufacture of women's clothing, the addition of another shift of workers will increase the business's profit potential. There are a lot of fast food establishments and convenience stores in the Philippines that are open 24/7. Most manufacturing companies have three shifts of employees to work around the clock. The idea is to maximize the availability of establishments (i.e. fast-food and convenience stores) to consumers and to increase the production capacity of manufacturing companies.
Acquire a soon-to-fold business: The owner of a business that is soon-to -fold is more than desperate to sell his company. So why buy a business that is about to go bankrupt? First, make sure that you are buying the assets of the business and not the corporation itself as doing so increases your liabilities. Second, included in the acquisition of the assets is its customer base. Third, you also gain its pool of capable employees.
Franchise the business: Franchising your business opens the door for more profit with less investment as the franchise would have to put up the capital. Your business would be situated in great locations chosen and acquired by the franchisees. Lastly, franchisees are more motivated to make the business grow for quick ROI.
Provide Your Own Supplies: Instead of sourcing for suppliers, be your own supplier! Majority of fast-food chains in the Philippines have their own poultries and piggeries. Small scale enterprises buy their supplies wholesale. You will generate more profit and have better control of the product's quality. You might even be a supplier for other businesses of the same nature later on.
Additional Products or Services: If what you are offering is already being consumed by your targeted market, you can readily add other products or services to your inventory. Even large conglomerates started out in the manufacture of an item or two and their growth expansion started out with the addition of other items to their list of products. Another good option is to add another service connected to your business. If you are in the catering business, you can add event coordinating and styling to your services.
Internet Marketing: Selling and buying products online has evolved many folds over. Having a company website is no longer sufficient: it is a must to promote your product or services online. The use of social media for marketing is extensive. It also paves the way to introduce and sell your products in other countries.
There are other ways to expand your business in the Philippines. The important factor is to identify the market that you are targeting.
A way of minimizing your overhead expenses when expanding your business is opting for a virtual office. In this endeavor, Servcorp is the perfect company to assist you.