Whether it is a matter of greater production capacity, expansion of sales channels, or points of sale, investment in greater reach of customers, it is essential to develop an expansion strategy.
The business expansion strategy provides answers to:
- How much market share do we have, and how much market share do we want to achieve after implementing the business expansion strategy?
- Timeline – what time does it take to implement and to achieve optimal, targeted return per implementation?
- How much capital investment (CAPEX) is required to carry out the expansion? Do the project costs and treatment of CAPEX relate to the Profit and Loss Account or the assets? What is the impact on the cash flow of the project?
- To what extent is a capital investment required to be an operational investment (OPEX) related to replenishing operating costs for the expansion to proceed smoothly (cost of salaries, rents, marketing, etc.)?
- How should existing processes be revised, and what should future operations look like?
- Can the business expansion strategy be implemented from its operating cycle (adequacy of current cash flow), or will it need to be financed from external sources?