Business Growth: Questions You Need to Ask

In expanding your business, look for opportunities to leverage your existing skills as well as your current commercial footprint. To evaluate this, you must ask yourself several questions. The most helpful questions to consider are What additional products and services would our existing customers like to buy from us, presuming we had the capability to provide them in an efficient and high-quality way? and What additional products and services could we deliver in an efficient and high-quality way, presuming our customers needed them?

New responsibility centers are often related to serving new geographic areas. For example, our company has added branches in Aruba, Edmonton, and Seattle in the past year or so. When we enter new markets, we confirm that the customer needs in that area are compatible with those of currently served geographic markets. For example, do our current customers in other geographic areas have facilities in the new target area? Are the procurement practices of the major customers in the area similar to other served markets? Is the general profile of facilities in the area comparable to other served markets? If so, then our approach is to replicate our branch model in that location, utilizing our well- developed management processes for running a branch.

However, it is also important to look for ways to expand service offerings for the customers and geographic regions you already serve. For example, in the past year, we introduced field valve repair services to our offerings. While we have a small handful of dedicated field valve service personnel, the majority of services will be provided by technicians currently in our branch locations.

Before launching any new service line into the branch service network, focus on the compatibility of the new service with your existing business. When considering this issue, you should ask the following questions: Are the customer managers with whom we deal directly involved in the procurement process of the new service? Is this a complementary sale, a service add-on, or a completely new service? How are we leveraging our existing relationships and resources? From an operational viewpoint, can our existing technician network (with appropriate training) provide the service in a safe, efficient, and effective manner? If not, how are we leveraging our operational presence? There has to be a fit both with your current customers and with your current operational capability.

How do we balance initiatives to expand geographically with initiatives to expand within our existing service network? We view both types of growth as being equally valuable . Our philosophy is to pursue the lowest hanging fruit first. In other words, we give priority to new growth initiatives that are most closely aligned with our current business. Regarding new geographic territories , we prefer to go where existing customers already know us (via our relationships with sister plants) and, ideally , where we can receive some customer commitments before we establish the service location. Regarding new service lines, we prefer the opportunities that are relatively simple expansions that can be easily managed. By sticking closely to what we already know, we have grown, and expect to continue to grow, our business without significant risk or upfront investment. If a new initiative is going to require considerable capital investment, we will design our entry on a small scale. This way, we can test and affirm our ability to be successful before we make a major capital investment.