Creative Steps for Expanding a Small Online Business
Owners of small online businesses that have survived their startup phase soon discover that they face an altogether new set of challenges. Chief among them is the need to grow and expand their organizations to better serve their markets and enhance the owner equity. Growing a business of any size is a continual struggle. Present day economic realities make the expansion of smaller enterprises especially challenging.
When one considers that smaller organizations commonly lack access to working capital, it's easy to see why. By exploring creative alternatives to traditional business development plans, smaller online organizations can overcome the limitations put upon them by a dearth of available funding options.
For any organization, the quickest path to growth is through acquisition. When the money is not there to buy another company, the fallback solution is to use paper assets to close a purchase transaction. This can take the form of a stock swap, secured or unsecured promissory notes, barter network trade credits, or some combination of these.
In some cases, a small organization can buy a much larger one using a corporate finance technique known as a leveraged buyout. In a leveraged buyout, the assets of a target company are used as collateral for bank loans used to buy the controlling stock of the target organization. In this way, a small company can grow instantly by acquiring a larger one. The first step for entrepreneurs interested in growing their operations in this way is to seek guidance and counsel from an experienced CPA firm.
Organic growth is how most small businesses approach the conception of expansion. Small organizations are for the most part quite nimble, and can be relied upon to respond quickly to perceived changes in their local economy. The success of an organic growth plan in the modern era requires a bit of introspection. Businesses must leverage their existing customer relationships in order to drive increases in sales volume and that all-important referral business. The development of referral business is precisely what "going viral" is about.
The rapid diffusion of an organization's brand in this matter requires having an online social media presence. The good news is that the startup costs of developing a social media marketing platform are minimal and every small business can do it. Establishing a social presence is easy, but to be successful the small business operator needs to have a clear understanding of their customer's demographics including their use of wireless Internet devices. For a small business operator a logical first step in the process of developing an effective social media strategy is to sit down with a respected social media consultant.
A compelling strategic alliance can be a powerful tool for driving small business growth. Working with an outside organization does not always have to involve a formal partnership agreement. Sometimes a simple joint venture deal is sufficient.
Joint venture arrangements are quite frequently temporary and limited in scope. They afford the entrepreneur an opportunity to obtain the benefits of partnering with another entity by sharing resources and expenses without the legal entanglements associated with long-term partnership agreements.
Businesses successful at developing a useful and proprietary business process or model make good candidates for franchising. Unfortunately, franchising is a tightly regulated industry. Franchise law is complicated and involves costly and extensive legal work. The full costs for developing a salable franchise model can approach $100,000. An inexpensive alternative to franchising is licensing.
Licensing a business process is in most cases a more affordable option and is not difficult to do. The regulation of licensing agreements falls within the purview of franchise law. By using solid licensing agreements, licensors can take advantage of the same benefits and protections franchisors enjoy without the legal costs and burdensome registration and disclosure document requirements.
About the Author
This article was provided by Todd Cabrili, business graduate and young entrepreneur. One of the best ways to expand your business, services and goods is using a company like Stevens Transport to reach a much larger range of consumers.