While operating a business online usually costs much less than one found in a brick-and-mortar location, expansion plans will likely require more capital. While it is usually necessary to wait until your growth plans have been solidified before knowing exactly how much you will need, it is extremely helpful to locate and verify funding sources at the very beginning. This way you have an idea which expansion ideas are feasible, and which are beyond your reach.
There are a few different ways you can acquire additional funding for expansion plans, both in the public arena and the private. Certain ones may be better for some situations than others, so always research these options exhaustively.
- Grants: There are a wide variety of both government and private grants available for businesses looking to grow. Top government resources in this area include Grants.gov and the SBIR/STTR (Small Business Innovation Research/Small Business Technology Transfer) programs. Corporations that provide grants include FedEx, LendingTree, and NASE (National Association of the Self-Employed). You may even qualify for additional grants if you are in a specific demographic, such as women, veterans, and minorities.
- Loans: While there is always the need to pay it back, a loan is usually easier to acquire than a grant. One of the easiest ways to find the perfect loan for your business is by visiting the SBA (Small Business Administration). Here you will find Lender Match, a resource that matches business owners with the best loan programs available to them. Alternatively, you can visit the bank you do your business through, to see if they can provide you with the money you need.
- Venture Capital: Individuals and venture capital companies can invest in your business in return for a piece of the ownership pie, or for a specific amount of interest on the money they invested. The higher the risk of your expansion, the greater the returns you need to offer to attract this type of investment. Professionals, such as lawyers or bankers, are excellent sources to help you find venture capital for your business. However, it is important to note, this type of funding can take quite a bit of time and effort to find.
Expand to New Sites
One of the best things about operating a business in the virtual world is the capability to open up new “branches” with much less capital than a brick-and-mortar location. Developing and launching a new website, one that complements your existing site, can breathe new life into your business by allowing each one to focus on a different type of product or service. While each site is likely to be associated closely with each other, having a dedicated space will help avoid cluttering up a single site, which can make it difficult for customers to navigate and find what they are looking for.
On average, it takes about three times the cost, or more, to sell something to a new customer rather than an existing patron. This makes it very important to come up with ways to keep the customers you have loyal, and coming back when they have future purchases to make. An excellent way to accomplish this is by instituting loyalty programs that reward customer for repeat business. This can come in the form of special pricing, discounts for a certain number of purchases, or even valuable freebies when a certain amount is spent. Not only will this retain customers much more effectively, it can incentivize them to spend even more money than they originally planned to.
A loyalty program helps not only in retaining existing customers, but also in attracting new ones. If a potential buyer sees that you reward for continued purchasing, they are much more likely to select your establishment than one that does not.
Add Associated Products
No matter what type of product or service you offer, chances are there are other products closely associated with them. For example, someone who is interested in a TV may also need cables to go along with it to hook up to the various devices that make up most home-entertainment setups. If you offer these additional products, not only does it increase your sales potential, it also gives your customers one central location for all of their needs. This precludes them from shopping elsewhere for the extras, and potentially taking all of their business to another establishment that does provide it all.
If you have a branded product or service, one that you own complete rights to, licensing it out to other businesses to sell under their name is an excellent way to generate additional income and increase the visibility of what you have to offer. For a successful product or service, companies may pay you upfront to be able to sell it, or a percentage of any sales they make.
This is one of the more inexpensive methods to grow an online business, since all promotion is done by the business you licensed to, rather than having you fork out the time and expense yourself. This lets you focus on your sales specifically, all the while giving you a passive income that can increase your bottom line exponentially.
Finding allies that operate businesses similar to yours, and forming a lasting partnership with them, is an exceptional way to instantly expand to a whole new swath of potential buyers. For example, if your business sells nutritional products, or those geared towards healthy living, you may want to see if a local fitness center is interested in selling your products to their members.
These opportunities exist online as well, as long as it is a site that sells or offers a product or service that is similar to yours. The benefits of these partnerships are similar in many ways to product licensing, given that all aspects of marketing and sales are handled by someone else.
Merge/Acquire New Businesses
One of the easiest, while most costly, methods of growing your business as a whole is to simply acquire other online businesses that are related to the one you are operating. Snapping up another website that is your direct competitor not only gives you access to their existing customer base, there is less competition to contend with for new customers. If the business you are interested in is in bankruptcy proceedings, you may even be able to pick it up for a song.
If you do not have the resources to outright purchase another business, it may be beneficial to merge with one similar to yours. While this would result in sharing both the profits and operation of your business with another party, the advantages of extra manpower and resources may be just what is needed to tip the success scales in your favor.
While successfully starting and maintaining your online business are important steps along the path to financial success, growing and expanding what you have to offer means staying competitive and piquing the interest of both new and existing customers alike. Any time and expense spent in figuring out how you can grow safely and effectively will pay off in spades over the long run.