Many small-business owners want to target a larger customer base to ultimately increase sales. But while expanding your business can lead toward greater success, it’s not something to be taken lightly. Without careful planning, you might accidentally open up a can of worms.

As discussed in 5 Tips to Nurture and Expand Your Small Business, Part 1, there are a number of areas to understand before you should approach expansion, such as making a financial plan, investigating new markets and diversification options, forming alliances, and building your online community.

small business expansion

And you’ll have to answer a lot of questions: How do you take on new customers without losing old ones? How do you manage employees who may be ill prepared for this new influx of business? How can you research the demographics of your customer base? What is the role of social media in marketing your newly prosperous business?

Below, Jim Alles—the New York City chapter chairman of SCORE, a resource partner of the Small Business Administration—offers advice based on 30 years of experience on such topics as social media, developing an outline for growth, understanding and communicating with employees, obtaining research material, and the differences between urban and suburban markets.

1. Enough of the Flyers Already. “I tell people who are afraid of or think they don’t need social media to either retire now and sell your business, or read a book called The Zen of Social Media Marketing: An Easier Way to Build Credibility, Generate Buzz, and Increase Revenue. Facebook is relatively cheap for advertising. That is the new way of marketing and will be increasingly so for small businesses. Small businesses typically can’t afford traditional marketing.  And handing out flyers and going out in the street and giving out stuff doesn’t work well. Social media and all its different marketing tools have changed the world.”

2. Urban vs. Suburban Markets: Which One Suits You? “There are different needs for small businesses operating in urban versus suburban areas. Each has their negatives and positives. The suburbs may be a cheaper place to operate in, with lower taxes, possibly less regulation, and you can get skilled workers there. So if you have the option of the two, I’d recommend suburbs over the inner city. Dealing with the regulations in larger cities can take a long time.”

3. Avoiding Common Pitfalls. “I see small-business operators making the same common mistakes over and over again. Here are a few examples: 1. They don’t have a plan; 2. They don’t know who their customers are; and, 3. They haven’t planned for the financing to support the expansion. I’ve seen 400 clients personally, and in the past three years, I’ve met only one who clearly understood their clients. We asked them straight off, ‘Tell me about your customers: Can you profile them? Can you give me the demographics, such as where they live? What are their habits? What do they like, and what don’t they like?’ Almost all of them looked at me with glazed eyes.

“There is a lot of good research available in almost all of these industries. We promote the Science, Industry and Business Library—part of the New York Public Library—and it has a tremendous wealth of research reports on almost anything or anybody or any buying habit, from business to business, and business to consumer. Very few people avail themselves to look at these reports, or they don’t do research on their customers. Then you’ve got survey opportunities, but surveys have to be well constructed and typically don’t work efficiently by having people fill out a form. Again, if you are good at social media, you have a much better opportunity to know your customers completely.”

4. Helping Employees to Help Themselves (and Your Customers). “There is a wrong way and a right way to handle employee expansion when growing your business: 1. You need to have regular group communication with the organization—both in writing and face to face—that tells people what you’re doing and why you’re doing it, and also, what’s in it for the employee; 2. The employees need to clearly understand the profile of those customers they are going to be serving in the future, what their needs are, and how to satisfy them; and, 3. The owner needs to make sure the organization has the proper training to deal with that expansion.”


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