What is Business Expansion? Basics and What To Consider

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Business expansion is a goal for them, especially business people who want to develop their business in the future. As entrepreneurs, we also need to consider expanding our business so that your business is not stuck or not growing. However, to be able to expand your business, you need to go through the right processes and strategies. With the right strategy, this can help you carry out a better business expansion plan.

To be able to expand your business, you don't have to wait for your business to grow, because business expansion can be done for entrepreneurs who have small and medium businesses. To be able to expand, you need to know the meaning, purpose and benefits that you can feel later. 

With the advantages of this business expansion, it is not impossible that your business will be better known by the wider community. If your business is widely known, there will be even more opportunities for consumers to enliven it.

Business expansion is an important stage for a business because it helps to grow and develop in a better direction. Every business that wants to achieve maximum profit, must have the goal of expanding its operations.

Because like living things, running a business requires a process to grow so that business expansion is needed. However, as quoted from the Reference for Business page, the process of business expansion is a stage of company life full of opportunities and dangers.

Therefore, you as an entrepreneur need the right knowledge or knowledge before expanding your business.

What Is Business Expansion?

Recognize Business Expansion, How to Create a Business to Grow

Expansion is taken from the word 'expansion' which means to spread. Expansion in general can be interpreted as a process or action taken so that something can become bigger or wider.

The Cambridge Dictionary of languages defines expansion as an attempt to increase a certain size, number and importance. In simple terms, expansion is an activity carried out to make something bigger or more improved.

According to the Cambridge Dictionary, expansion means an attempt to increase a certain size or amount. So, if interpreted more generally, expansion increases or expands an activity to become larger. If interpreted as related to business, then business expansion is an activity that is able to expand the business network from production to distribution.

This economic development was marked by an increase in the price of goods and services, an increase in the production of goods, an increase in the amount of money circulating in society and an increasingly consumptive society.

What are the objectives of market expansion?

Expansion has various purposes that can help you to grow your business and generate a lot of profit for your business. There are several expansion goals that you can find out below:

  • Business expansion can attract new customers
  • Business expansion can help generate more profits for consumers
  • Dominate the market by controlling the higher market
  • Able to increase competitiveness with the development of greater resources
  • Can lead the market to be able to influence market prices
  • Able to increase the bargaining power of stakeholders including suppliers, distributors and consumers
  • Able to increase economies of scale and extend costs to multiple outputs and lower costs per unit.

What is considered a business expansion?

In carrying out business expansion, there are several types of expansion that need to be known so as not to take the wrong step in doing so. Types of expansion that need to be known include:

1. Mergers

Merger is an activity to combine at least two or more companies into one. This type of expansion can be carried out by an attempt to expand the business where the more dominant company maintains its identity while other companies follow suit.

2. Acquisition

Acquisition is a type of business expansion in the form of taking over ownership of assets or shares of a company from investors. Expansion of this type is used to maintain or guarantee that the resulting product can still be maximally absorbed by the market.

3. Hostile Takeover

Hostile takeover is a type of expansion that is almost the same as an acquisition, the difference lies in the forced takeover of a company. The takeover of the company in this expansion was carried out by opening a bid price for the shares to be sold at a price that exceeds or is above the market price in general.

4. Leveraged Buyouts

Leveraged buyout is a type of expansion carried out by a company by borrowing money from other parties which is then used to make purchases at other companies.

Business Expansion Strategy

Business Expansion Strategy

If you want to expand your business, there are several things you can do, such as the following:

1. Make Careful Planning

The very first thing if you want to expand your business is to do careful planning. A mature plan is very important before carrying out later activities, and helps you in the business expansion process. There are several questions you can try asking yourself, such as:

  • What is your target going forward?
  • How do you see this business in 5 years?
  • What is your current sales condition?

After these questions are answered, there are several things that become important points, such as:

  • Smooth sales with consumers who have become customers in a good number, so the business expansion feels ready.
  • This business can already have its own brand that can be produced by itself, no longer with the help of suppliers.
  • HR needs increase and the sales process will also have a big impact and fast. This can strengthen the readiness of business expansion that you can do.

2. Planning for Business Expansion

So, now is the time to make a business expansion plan. Here's how, let's see:

  • Product inventory should be increased. This aims to meet market demand with an amount that you can specify.
  • Add a variety of products to provide many choices for consumers.
  • If you plan to increase stock, then a new warehouse may be needed.
  • Offline stores can be made to increase trust to make it easier for customers to shop.
  • Human resource requirements can increase sales efficiency as well as effectiveness with various operational activities.
  • Start targeting business expansion areas, for example New York, which was previously only the New York area.

If you have other plans, they can also be included in the business expansion plan. Arrange this business expansion plan to realize a more advanced and growing business.

What is the best way to expand a business?

So, you can apply some of the following tips for expanding your business as a guide:

1. Plan carefully

The first and most important thing you need to do before expanding your business is to plan carefully. Make a business plan as detailed as possible so that you are really ready to take your business to the next, better step.

Quoted from Business Tech, thorough planning can help you avoid losing control of your business. In addition, compiling a business plan can help you get an idea of how and what the business development will be like during the expansion process.

Do not let you expand your business without a careful plan because this action is very risky for the continuity of your business.

2. Launch a New Product or Service

You can also expand your business by launching new products or services. This is the simplest business expansion tips. However, if done correctly, it can be very profitable for your business. Comparable to the results, launching a new product or service to develop a business also has its own challenges.

As a business owner, you need preparation because creating new products or services for customers is not something easy. You need to find out which products and services customers want and how much money they can afford to pay for them.

To get this information accurately, you also need to do thorough market research before creating a new product or service. You can ask customers about new product or service ideas, what price they expect, and more.

3. Active Business Promotion

Another way you can do to expand your business is to actively promote it to potential customers. A thorough marketing strategy and promotional planning are important to do so that you can reach your target market properly. Actively promoting can also strengthen the branding of the brand, product or service that you offer to customers.

With regular promotions, they will get to know your business better. So, don't forget to provide a special budget for this. Not only encouraging new customers, promotions can also strengthen existing customers so as to create customer loyalty.

A strong customer base can help your company grow and develop faster. You can do promotions with various sales channels. Starting from websites, marketplaces, to social media, such as Facebook, Instagram, Twitter, TikTok, WhatsApp, and others.

4. Find a New Target Market

The next strategy for those of you who want to expand your business is to find a new target market.

According to Fox Business, most businesses target their sales and marketing efforts to specific customer markets based on demographics such as age, gender, and location or psychographics such as interests, activity, and value.

To grow, your business also needs to consider ways to reach other new customers outside the target market. This is the right step in developing your business. You can find new customers by promoting your business across various sales channels.

It can also target new customers through new products or services according to their needs or open business branches in certain locations so as to make customers closer. Apart from expanding your business, targeting new customers can also help your business get ahead of competitors.

By expanding the market, you have the opportunity to get bigger profits. Sometimes, market expansion is also necessary for a business for several reasons, such as limited local market penetration, lower cost of capital, higher returns, or changes in customer preferences.

5. Implement a New Sales System

You can also expand your business by implementing a new sales system. For example, by utilizing the internet for promotion and selling. For small businesses, the use of technology and the internet as a marketing strategy has a pretty good impact on growing.

So, don't hesitate to take advantage of online business opportunities. Compared to opening a physical store, selling online is considered much more cost-effective. You don't need to rent a place to sell and you will still be able to reach many customers via the internet.

You can do this new digital sales system through websites, e-commerce, or social media. Choose what suits your needs or if possible, try a combination of the three. To make your product or service easy to find online, use SEO techniques to increase your high ranking in search engines. Online advertising that uses search engine optimization (SEO) techniques can help you reach a wider audience.

6. Conduct market and industry research

Quoted from the Hubspot page, researching the state of the industry is the right way to make business expansion decisions. This market and industry research can also give you answers as to whether business expansion really needs to be done or is it feasible to run and can generate the expected growth.

There are various ways to conduct market and industry research. For example, by running surveys and focus groups with existing and potential customers or exploring existing industry research.

This method can help you find various insights from customers so that you can be more precise in determining time, budget and final goals better. You can conduct market and industry research on a regular basis so that you get up to date business knowledge.

7. Cooperation with Other Companies

To develop your business, you can also expand your business through collaboration with other companies. For example, by acquiring another company in the same industry.

This is the fastest strategy towards business growth and expansion. This is because acquisitions can multiply the size of your business in no time while increasing your sales and revenue exponentially.

Launching the Chron page, acquisition is a process in which a company buys another company to expand its operations. A small company can use this type of strategy to expand its product line and enter new markets. However, you have to consider this carefully because acquisitions can be risky for your business.

Be sure to know the company's financial condition, the strength and depth of its management team, the breadth of its customer base, and the health of existing contracts. 


There are many activities that can be carried out through business expansion, from opening a new branch, building partnerships with other companies, creating new products, increasing marketing and many more.

This is an explanation of the meaning and examples of business expansion that you should know about. Business expansion is a necessary process to help your business grow. However, don't do it without preparation, OK?

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