For example, a business owner may choose to diversify the enterprise’s product and service offerings to increase market share, consider forming a partnership or joint venture with another entity, or go through merger and acquisition.
What to Consider
When making the decision, it is very important to have a clear picture of where your business stands. A thorough analysis of the business performance thus far is the best way to start the process of building an effective growth strategy. In doing so, you need to review your financial statements, customer feedback, and key performance ratings. You should balance these with the current and prospective market trends to have an idea of what the future may hold for the business.
Making the Choice
Once you have a closer look at how you are doing and the factors behind your business’ success, you can determine which of the options mentioned above is the most practical, cost-efficient, and logical.
Diversifying the Business or Increasing Market Share
Ask yourself if your business has room to grow or if you have already saturated the market. And if there is room to grow, see if you can increase your market share by tapping on new market segments, increasing pricing, or offering new products and services, effectively diversifying your business offerings.
Joint ventures, Partnerships, or M&A
You can consider the option of entering into joint venture agreements or partnerships or going through a merger and acquisition (M&A). The first two options (joint venture and partnership) are ideal if you can spot another entrepreneur with whom you can share your expertise with. In Utah, accounting firm Tanner Co explains that good mergers and acquisitions involve two companies with similar or closely-related business offerings.
There are a lot of intricacies involved in this process so it is very important to hire and consult people or companies who are experts in this field for you to make the transition secure.
Seeking the help of independent advisors is always an advantage as it gives you the chance to look at your option through the eyes of a disinterested party. The result is ultimately a wiser, well-considered decision for yourself and your business.