Many small business owners are always looking for ways to grow their companies. This blog post will give 5 small business expansion strategies that can help. So read on and get some tips to take your business to the next level!

Understanding Business Expansion

The process of business expansion is when a company grows in size and scale. The goal of expansion is typically to increase profits and market share. There are many factors to consider when expanding a business. The most important is usually whether or not the expansion is sustainable.

Can the company continue to grow at the same rate, or will it eventually plateau? Other considerations include the financial feasibility of the expansion and the impact it will have on the company’s existing operations.

The economic growth and decline cycle is predictable, just like the change in weather. Economists use historical data and trends to try and forecast when economic expansions and contractions will occur. 

The business lifecycle phases are Expansion, Peak, Contraction, and Trough.

The Expansion Phase is when the economy moves out of a recession and money becomes cheaper to borrow money. The businesses build their inventory back up, and the consumer starts to spend. The Gross Domestic Product (GDP) increases, the Per Capita Income (PCI) goes up, the unemployment rate decreases and the stock market usually performs well.

The expansionary cycle’s peak is when the economic growth rate finally slows. Demand increases sharply, leading to soaring costs of goods and an economic slowdown.

The contraction period is when the economy starts to slow down. As companies start to lay off workers, they start to cut back on spending.

The Trough Phase is when the economic cycle moves from the recessionary period to the recovery period. This occurs after the economy is at its lowest and sets the growth stage.

The economy is constantly changing. Investors, policymakers, and economists can better predict the future and capitalize on investment opportunities by looking at previous economic cycles. By knowing when expansions occur, we can prepare for opportunities, and when contractions are imminent, we can prepare ourselves for potential problems.

Special Considerations

Indicators such as the number of hours the average employee works, unemployment figures, and consumer demand for new goods provide insight into whether the economy is expanding or contracting.

Economists and analysts have long agreed that the two main forces that affect profits and the economy are capital expenditures (the money companies spend to maintain, improve, and buy new equipment) and interest rates.

The Credit Cycle

When the economy needs a lift, policymakers try to lower borrowing costs, encouraging businesses and consumers to spend more. When the Federal Reserve (Fed) cuts interest rates, saving is no longer favorable, and the expansion phase begins.

Money flows freely through the economy, companies take on loans to fund expansion, job prospects improve, and consumer spending rockets.

Eventually, the cheap flow of money and subsequent increase in spending will cause inflation to rise, leading central banks to hike interest rates. Suddenly the onus is on encouraging people to rein in spending and moderating economic growth.

Company revenues fall, share prices decline, and the economy contracts again.

The Capital Expenditure (CapEx) Cycle

Economists, such as Irving Fischer, have noted that business cycles occur alongside companies attempting to meet the ever-changing demands of consumers.

Companies tend to expand and borrow money to invest in new equipment when the economy is doing well.

Initially, this results in more sales and increased return on investment. However, as the competition heats up, some companies may act out of greed, which can have negative repercussions.

When companies can’t keep up with their growing debts, they eventually have to lay people off.

According to research from the NBER, the average length of a recession is 10 months.

5 Small Business Expansion Techniques

How can you grow your business in a slow-growth or stagnant market?

Here are 6 strategies to help you expand your small business.

1. Introduce new products to your offering.

This seems like a simple strategy, but implementing it effectively can be difficult. For one, you need to decide which products or services your customers want and how much they are willing to pay.

Finally, determine if you can make a profit by selling these products or services.

2. Increase your revenue by selling more to your existing customers.

This is the opposite of the first method: further penetrating your existing customer base.

To identify your most promising customer segments, start by performing a market segmentation analysis. This will divide your customers into segments based on age, gender, location, buying history, and so on. By analyzing the potential profitability of each segment, you can focus your sales and marketing efforts more effectively.

This information can create targeted marketing campaigns that focus on selling new products and services to your most profitable customers.

3. Try expanding into new markets.

If you want to expand your business, one option is to market and sell your products or services to new customers in different segments or niches. Another possibility is to target new customers in different locations from where you currently operate. By doing this, you can open up new opportunities for your business and potentially increase your revenue.

4. Find new markets.

Most companies have sales and marketing efforts targeted to specific consumer groups based on their demographic or psychological characteristics.

Are other customer markets that might be viable for your products and services? You may need to ramp up your advertising to reach these potential new customers.

5. Expand your sales and delivery channel.

The web is an example of how new sales & distribution channels can drastically change how small businesses operate.

Many companies have taken advantage of the internet by expanding their reach to potential customers. Some businesses, like traditional brick-and-mortar stores, have opened their websites. Other companies, such as SEO firms, have utilized internet marketing strategies to reach a broader market.


You are now armed with 5 effective strategies to help expand your business. The only remaining question is which strategy is right for you. This will depend on your business’s specific situation and the available resources. No matter which one you pick, ensure you are prepared to put your efforts into achieving success.

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Editors Note:

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Justin McGill
About Author: Justin McGill
This post was generated for LeadFuze and attributed to Justin McGill, the Founder of LeadFuze.