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Business expansion during the economic recession

How to expand your customer base in times of trouble

Why is it so important to cultivate new customers? At any time (but more particularly during a period of recession, as that which we are currently experiencing) expanding your client base is an essential issue for all companies. First of all, during a recession, available business tends to dry up more quickly. Of course, the type of product or service which you offer is a key factor: if it is a necessity, then you will see less of a drop in demand. However, if you are in the luxury goods market, then you can be sure that many of your regular customers are simply going to cut you out of their budget altogether, or keep spending to an absolute minimum. Secondly, if your business sells services or goods which are used infrequently (such as house purchase or wedding dresses) then you can be sure that the vast majority of the population is going to cross your threshhold not more than two or three times in a lifetime. This means that you have to have a steady flow of new customers to keep you busy.

Having established the necessity to build your business, how should you go about this? Again, it depends on a number of factors such as type and size of business, budget and geographical location. Here are some suggestions:

Open new premises
This is potentially a valid strategy if it rewards you with enhanced visibility for your customers and greater prestige for your organisation, as well as guaranteeing valuable work space/showroom. You should only undertake this type of expansion if you have had a number of years of steady growth, and the costs of the move and refurbishment won’t outweigh the potential benefits. It also represents a good opportunity to re-contact existing and new customers inviting them to an inauguration of the premises.

Diversify
It is nearly always a good strategy to diversify into different markets, which are linked in some way to your existing business. Thus, a manufacturer say of fitted kitchens could expand the range to include fitted wardrobes or the furnishing of commercial premises. This diversification can shield against seasonal or other drops in business.

Company merger
On the face of it, a company merger offers many advantages when two similar or complementary businesses come together. You can immediately double or triple your capacity to respond to clients and thus to generate greater income. However, it has to be carefully orchestrated as there are often many hidden problems which may come to the fore once it is too late – employee disputes, insurance claims for defective products/negligent services, unpaid debts and so on. Do your homework here before taking the plunge. You should certainly order up Company Reports/Credit Checks on any company that you plan to merge with to ensure economic viability and absence of adverse entries.

Global Expansion
If there is a demand for your product at home, then it possible and likely that this exists overseas also. For many companies globalization has become not a choice but a necessity. This too needs to be managed with care; choosing advisers who are familiar with the areas you wish to expand into. It should be approached one area at a time, consolidating the presence in that country, prior to further expansion.

Optimization of Internet presence
This aspect cannot be stressed enough. Bill Gates announced that at the end of 2002 there would be only two types of businesses – those present on the internet and those with no business at all. This is perhaps an exaggeration, but the importance and influence of the internet cannot be understated. Statistics also show that over 80% of visitors to your site come via the search engines. There are currently over 4 billion web pages and every 50 days traffic increases by 50%

Obtain Highly relevant, Company Marketing Lists
Obtaining selective marketing lists obtained according to your criteria is an excellent way of finding new clients in the right geographical area, in the right field and with the characteristics you require. It is possible to obtain lists where any companies with adverse payments histories are cancelled out, thereby ensuring a higher quality of new clients.

In conclusion, you should aim to grow your business steadily, consolidating each new expansion before moving onto new areas. It is important to remember that overexpansion is one of the main causes of business failure and new expenditure should not be committed where the existing income is insufficient to meet it.

Comas srl is an Italian, ISO-certified company operating in the field of commercial information since 1976.



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