YOUR GUIDE TO SMALL BUSINESS
Your Guide to Small Business is designed to give entrepreneurs the tools they need to succeed. It’s not a “how to” book; it’s an information resource that will help identify the things one needs to do before, during and after launching a business. |
Part 5 - Expanding Your Business
Topics Covered:
"One of the biggest mistakes people can make is to move forward without clarity. So often businesses expand and in the process dilute what they do. The minute you dilute, you diminish your branding and that’s bad for business. Stop and really think about whether or not you want to grow and plan your growth with purpose."
Ramona Ostrander
Ontra Enterprises
Guelph
If your business is successful, at some point you’re going to feel pressure to expand.
Determining if expansion is right for you
In many ways, expansion is like starting out all over again. You’ll have to:
- develop a new business plan and new sales and marketing strategies
- go after more financing
You’re also likely to have to:
- hire more employees
- find larger premises
- acquire more equipment
On the plus side, all that will be a bit easier than it was the first time around because you have an established track record and a lot more business experience.
But as well, you may have to:
- create new products or services to satisfy your customer’s demands
- travel more to develop and serve new markets
- be involved more in management—which may mean doing less of what you have been doing
And, for sure, you can count on working even harder than you are already.
So, the question is: is expansion right for you? Are you up for all the new demands it will bring? Are you excited by the prospects?
There’s no law that says you have to expand, so if you’d be happier to keep things the way they are, that’s a good decision for you.
At the same time, you should be aware that many successful businesses take on lives of their own—a good example is Jackie Kevill and her Loony Lizard Dollar Stores—which can mean you’ll be forced to expand.
In that case, you can either manage the expansion yourself or find someone inside or outside your company to take the business to the next level. Your other option would be to sell your business to someone who’s interested in growing it.
Where to get help
If you’re ready and eager to expand, the Ministry of Small Business and Entrepreneurship can help you assess your current situation, develop your future plans and connect you with the right people, information and business resources.
Specifically, the Business Advisory Service Offices can:
- help you identify and overcome potential barriers to continued growth
- help you develop partnerships with leading financial sources and other professional services
- provide public- and private-sector information and contacts to help you manage growth-related issues
- provide opportunities to develop new business and strategic alliances
- direct you to key marketing and export resources and help your firm become export-ready
In northern Ontario, business advisory services offices are offered by the Ministry of Northern Development and Mines. You can call toll-free at 1-800-461-2287.
If going after foreign markets is part of your plan, you’ll want to get in touch with Ontario Exports Inc. (OEI). OEI consultants can help with:
- export education and counselling
- market information and intelligence
- product promotion and market contacts
Through its Virtual Team Ontario, OEI makes it possible for companies to join organized virtual trade missions and connect with international buyers without having to leave the province.
Leading Growth Firms Series of Reports
The Leading Growth Firms Series researches and promotes the effective management practices of CEOs of Leading Growth Firms. Reports are concise, innovative and practical, comprising the growth strategies and tactics of successful small and medium-sized firms. These reports are categorized below by topic. You may wish to download the full report or simply read an overview.
Export Development Canada (EDC) is also a helpful resource for small businesses interested in getting into international markets. Its web service, exportsource.ca, provides one-stop shopping for entrepreneurs ready to tackle the export market.
Finally, the Canada-Ontario Business Service Centre offers helpful guides on preparing, researching and entering world markets.
Spotlight on… Loony Lizard Inc.
A great concept, low overhead and carefully managed growth. Those are the reasons Loony Lizard Dollar Stores are a great success—and why their founder is one of Canada’s Top 100 Women in Business.
It all began in 1992 when Jackie Kevill, a former teacher, got the idea for a dollar store after visiting a shopping mall in New York state. “The concept seemed fantastic and I hadn’t seen anything like it in Canada,” she says. Jackie’s idea coincided with a $17,000 inheritance from her aunt and that was all it took.
She was able to rent space and buy merchandise, opening the doors with a promise to keep prices to a loony or less and make shopping a fun experience for shoppers and staff alike.
Within a few years Jackie was being bombarded with requests to franchise.
“I didn’t have a formal expansion plan in mind,” she says. “People approached me. I didn’t go looking. Initially I said no, but there were so many requests and people just wouldn’t give up, so I thought I’d give it a try.”
Two franchises opened in 1995, one in 1996 and two more in 1997. By then, Jackie realized that growth was inevitable and she took steps to ensure it would be as successful as the stores were.
“I took the same principles I started out with—value, trust, simplicity and fun—and applied them to the franchising effort,” she says.
Because most of her franchisees were neophytes to business, she prepared the Lizard Looniversity Training Manual that helps them with everything from bookkeeping to ordering and tracking merchandise to customer service strategies. She hired her brother to look for store locations and negotiate leases on behalf of new franchisees—and she assumed the start-up work for franchisees as well.
She also put together a group of about 250 suppliers and convinced a number of them to take part in regular trade shows for the storeowners, eliminating a great deal of the hassle of going from supplier to supplier, as well as the need for a central warehouse.
And to keep costs down so the quality of merchandise could remain high, Jackie decided there would be no fancy displays or money spent on advertising.
Her strategy has worked well. Today, there are 20 stores in southern Ontario that together sell over 16 million first-run, first-quality items a year.
“I’m surprised at how easily it happened and how uncomplicated it was, really,” says Jackie. “Initially I kept saying no because I thought it would be a horrendous undertaking. But once I started, I just took one step at a time and it turned out to be not that difficult.”
