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10 mistakes that your small business can try to expand

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You are a small business and you want to grow. It is true that most small businesses aspire to growth and become bigger and expand their reach, but expansion is not always without its pitfalls.

It is not uncommon for small businesses to make serious mistakes when they try to grow.

To shed light on this topic, Small Business Trends met Randy Nicolau, CEO of Poppin, furniture and office vendors, and Roger Edgar, CEO of LUX LED Lighting, a California-based lighting solutions manufacturer. to discuss their experiences with business expansion.

Small business expansion mistakes to avoid

The two CEOs of successful companies provided these tips on how small businesses can avoid committing common miscalculations.

Do not understand your client

One of the biggest mistakes made by small businesses when they are trying to grow is to not understand their customers and what their customers want. According to Randy Nicolau, the first step in understanding where you want to develop is to understand your customer.

"It's important to look for pockets in your datasets and to have a good commercial sense and think about what you could benefit from in your expansion.We had enough data on e-commerce for that and have found that we overindex some markets, "says Nicolau.

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Poppin analyzed his own data to discover that his favorite area is 50 to 2,000 companies in the technology, advertising, media and information sectors, which are also experiencing strong growth.

"We thought we could better serve the Los Angeles area from Santa Monica thanks to the success of our existing showrooms in San Francisco's SoMa neighborhood and New York's Flatiron neighborhood – two technology centers in every city," Nicolau said. . we.

Not to adopt a credible plan of action

The CEO of Poppin could not exaggerate the value of creating a blueprint that specifies how you will reach customers and gain a competitive edge in the new market.

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"For example, some companies are moving their call centers to promising cities like Detroit – where real estate is more affordable, and the city has the potential to become a future technology center," he said. Nicolau.

The CEO adds that Poppin constantly thinks about how people work from one industry to another and from one region to another.

"We learned to enter the SF area as people are more concerned about ergonomics, so we launched our Sit-Stand Loft Desk jointly with the opening of our offices and rooms. Exhibition in San Francisco, "adds Nicolau.

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Do not watch the news of the industry and do not act on trends and changes

Another mistake that small businesses may make when they are trying to expand is not to monitor industry news and react to market fluctuations and trends.

Randy Nicolau explained how Poppin always has a pulse on the industry news. As a result, the company was able to choose the most lucrative location for its new offices in Los Angeles, based on the fact that the chosen location was one where the density of businesses and millionaires were the most important. will be "there to welcome them".

Do not listen to the request

According to Randy Nicolau, it is vital that small businesses decide if they have the sales channels, infrastructure and customer relationships in place to launch on the new market, and determine where to leverage their core competencies.

Nicolau used Poppin as an example of how the company listened to the request before moving to a new area, stating:

"Building a sales team in San Francisco was obvious to us – we knew we were already working with companies like Google and Facebook on both coasts, so we listened to the demand."

Underestimation of the importance of early identification of gaps in resources and skills

Small businesses that underestimate the importance of identifying resource and skills gaps early on become problematic. As Randy Nicolau says, to ensure the rapid success of the market, it will first be necessary to identify gaps in resources and skills and to fill them quickly.

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"Think about what the expansion would entail and how that could affect operations, especially when it comes to managing a new office on a different coast," advises the CEO.

Disregarding the number of long-term employees

Another mistake companies can make in terms of expansion does not take into account the number of employees in the long run. When planning for expansion, small businesses need to think about the number of employees and what it will look like in six months to a year.

As noted by Randy Nicolau:

"This will have an impact on your space planning and overall design."

Avoid thorough market research

The failure to conduct thorough market research is another mistake that small businesses may make when they are trying to expand.

LUX LED Lighting provides a good example of a company that has developed successfully by conducting extensive market research.

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With the goal of doubling its annual business turnover, LUX LED Lighting has recently decided to expand into the direct-to-consumer market with the launch of a new website and of an e-commerce platform.

Roger Edgar, CEO of LUX LED Lighting, explains how in-depth research has played a vital role in the successful expansion of the company, stating:

"After a thorough feedback on the market, we realized that there was strong consumer demand for our LED lighting solutions." The new direct-to-consumer platform allows us to expand our community and our clientele. "

Overlooking Potential Pitfalls of Expansion

Edgar also notes how LUX LED Lighting took measured measures to determine the plausibility of success and the potential pitfalls before launching the product line. Edgar says LUX LED Lighting:

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"A patient market study helped us define our strategy for product development and distribution channels, in the place and manner in which we introduced the brand."

Failing to Demonstrate Differentiation and Value

According to Roger Edgar, in the current landscape of digital brand building, brands must compete at every turn to demonstrate differentiation and value, which is best managed from within.

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"While expanding into these new markets, the temptation to release control in exchange for early exposure has been constant.Many brands find these opportunities so attractive that they find themselves inevitably get back on their feet to put the proverbial genius back into the bottle, "warns the CEO.

Not investing sufficient time and resources in goals and techniques for expansion

Not devoting enough time and resources to expansion goals and techniques is another failure that small businesses can do in trying to grow.

As Randy Nicolau notes, "Of course, these tips are not a 'recipe for success', but investing time and resources in these preliminary steps should help you mitigate the risk of getting into a new market.

Are you a small business that has developed successfully? We would like to hear your success stories from expansion.

Stressed Photo of a businesswoman via Shutterstock


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