By Sunny Ackerman, President of Americas at Frank Recruitment Group
When it comes to great moments in a company’s lifecycle, expansion is among the most exciting.
Watching your business grow and develop is thrilling, and an indisputable sign of your continuing success.
If you’re in a position where you think it may be time to take on a new market, there are an enormous number of considerations to wade through to ensure that you don’t overreach and jeopardize the strong foundations of your company. Expanding your operations or opening a new branch can feel almost as dicey as starting a new business; so, is it worth the risk?
They say in business, you’re either growing or you’re dying. Growth rate is the ultimate indicator of the health of your organization—you might focus on turnover, market share, profits, sales, or head count, but however you measure your growth rate, if it’s not climbing, then your business viability is in question.
Even if you’re happy with the level that your business is operating at now, by eschewing growth opportunities, you’re rolling out the red carpet for your competitors to move into that space and snatch up more market share. In addition, fixating on one location, or market, is akin to putting all your eggs in one basket, giving you no backup if business were to dry up in the future.
Maintaining growth is more complex than ever in the modern age, but remains of principal importance for the majority of businesses. Gartner’s 2018 CEO Survey[i] reported that CEOs ranked growth as their top priority for 2018/2019, and while many CEOs are looking for deeper structural sources of growth, national expansion remains one of the most effective ways to expand your company.
There’s no business without customers, so clearly reaching new audiences in new markets is crucial to increasing your profits and allowing your business to develop. In an increasingly connected world, there is more opportunity than ever for businesses to expand their operations across the country, with minimal disruption to primary operations.
When I joined Frank Recruitment Group as President of Americas earlier this year, I immediately began looking for strategic locations from which we could build our presence across the North America. Since then, we’ve opened a new office in Tampa, bringing the number of US hubs to six; two more are set to open in Denver and Phoenix later in 2018.
As niche technology recruiters, we see first-hand how fast the tech sector moves; this constant innovation makes it an incredibly exciting space to work in, but it can also create skills gaps when tech professionals can’t catch up with mushrooming demand for experience.
As President of Americas, my job is to make sure we’re serving the US as best we can. There is enormous opportunity in the tech sector right now; tech is far and away the fastest growing industry in the country, and vibrant new tech hubs are springing up all the time.
Maintaining rapid expansion can be challenging even in the most blooming markets, however—when you’re looking to take your business into pasturesnew, here are a few of the core issues to consider before throwing a dart at the map.
Identifying new market locations
No one wants to stagnate, and you should always be ready to move into new spaces when opportunity and circumstances allow. However, be careful to avoidexpansion for expansion’s sake.
When business is good, and your feet are getting itchy, it can be all too easy to get caught up in the excitement of a move and breeze through your due diligence. You need to take the time to identify the right place for your business to move into. Find out where the growth in your industry is taking place, or even better, where it may take place in the near future. Trying to get in on the ground floor is always more risky than expanding into a geographical market that’s already established, but the rewards can be huge if done right.
Five years ago, almost every tech company in the US wanted to have a base in Silicon Valley. The Bay Area was the place to be for both start-ups and established tech enterprises, but today, the high costs of doing business and over-saturation of tech companies, many firms are beginning to branch out from the California tech bubble.
We used to think of the tech industry being concentrated in the country’s costal conurbations, but digital transformation is happening everywhere—and with it comes massive job growth. Places like Denver, Austin, Chicago, Minneapolis all have booming start-up scenes, with many cities funnelling massive amounts of money into start-ups to help drive local tech economies.
If you keep your ear to the ground in terms of which cities are piping money into your industry, you can get a good idea of where your sector will be taking off next.
A great team is the backbone of any successful business and having the right people in your corner becomes doubly important during expansion. Employees hired to help your business grow have a heavy load to bear; not only do they need to live up to the standards that’ve helped your business succeed so far, they’ll also need to be able to shoulder the business through the busy and often stressful growth period.
When moving into a new market, your employees are on the frontlines of business development, and the impression they leave in your new base of operations can make or break your expansion plans from the moment you land.
If you’ve spotted a great opportunity to grow or have set your expansion an ambitious timeline for your ribbon-cutting, you need to make sure that your time-to-hire isn’t coming at the expense of quality acquisitions.
This doesn’t just apply to new hires, but also to any internal moves you may be planning to staff your new location. Culture is fast becoming one of those corporate buzzwords, but the sentiment behind it is crucial; the most important factor in expansion hiring is finding people who share your vision and have the passion to help carry your business forward.
That said, it’s still important to do some research into your new market—average salaries, local regulations, competitor businesses—to make sure you’re attracting the right people.
Driving brand presence
Once you’re set up in your new market, you need to let people know you’re there. Most businesses don’t carry the kind of prominence that allows a company to drop a new branch anywhere they like and gain instant recognition. Brand awareness needs to be built all over again when it comes to new locations. The good news is that by this point you’ll have already mapped out your target demographic, your customer personas, and your brand voice will be well-established, so putting all those pieces together to form a marketing strategy shouldn’t be too big a task.
Brands thrive on customer loyalty, and brand advocates are hugely significant when it comes to building a name for yourself in a new market. Setting up a referral plan to help generate business is not only great for getting your name out there, but also provides the added bonus of steeping your brand in the sense of trustworthiness and reliability that can only come from a recommendation from previous customers.
Advertising can still be a massive win for businesses when done right, but don’t forget about thought-leadership when it comes to establishing your brand presence. Teaming up with local publications to provide useful, relevant advice and insight is a great way to position your company as a knowledgeable, supportive force in the market.
The ever-pervasive power of social media can’t be undervalued either. Focusing your efforts on the most appropriate platform for your business type can help you target new customers at a granular level, in a way that other, more traditional methods of advertising just don’t allow.
Whichever way you decide to build your presence, the most important part of new market penetration is keeping your brand essence intact. Translating what makes your brand unique and successful is key to growth—expansion is about reproducing your achievements in a new space, not diluting your brand. What you’re aiming for is a full-colour reproduction of your operations, not a copy of a copy of a copy, and as long as you’re achieving that, you’re heading in the right direction.