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Contractor Success September 2017

Are You Ready for a New Market?

August 29, 2017
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If your cleaning or maintenance company has achieved market saturation, expanding into a new region may sound appealing. A new market offers the opportunity for growth and increased revenue through a fresh customer base and a bevy of potential properties to target.

Expansion into a new market or region—whether by partnering with a company in the new area, buying out an existing company, or physically expanding to the new location with your employees and services—should not be undertaken lightly. Growing into a new region has the potential to exponentially increase the footprint of your business. However, to ensure the smoothest transition possible, you should consider three important factors before making your move.

No. 1: Carefully Select Your New Market

Although it may be tempting to choose your expansion target based on proximity or familiarity, it’s worthwhile to be more exhaustive in your search for a potential target region.

Determine if the market you’re scouting has other commercial cleaning or maintenance companies, as this would make the potential region highly competitive. If there are other organizations present, list a break down of their services and products so you can easily analyze how they compare to your own. Is there a specific demand from the customer base you can meet that others can’t, such as specialized facility services or green, eco-friendly products? Be certain a market share is available to capture before taking steps to expand. Purposefully selecting your new market will leave your company poised for success.

No. 2: Assess Your Company’s Capabilities

Growing simply for growth’s sake without being strategic about where and when to expand can lead to haphazard growth or being spread too thin to provide quality services. Just as you’ve scrutinized and analyzed a prospective market, be ready to cast the same critical eye on the growth capabilities of your business, including the time, energy, and financial costs of moving away from your existing market.

Determine whether your internal processes and systems are robust enough to stretch across another potential territory and still provide the same quality of service. If you’re worried about your company’s capacity for expansion, it’s best to set a longer timeline to complete the expansion and delay growth until your business is ready for the move, rather than rush into a new location before vetting all the pitfalls.

No. 3: Create a Strategic Entry Plan

If your business is looking to grow organically without merging or going into business with an existing company, it’s crucial that your decisions about hiring employees, location selection, marketing, and product and service offerings are airtight. Will you hire local experts or bring in trusted employees from existing territories? Will your current portfolio of products and services remain the same or will you adjust them to meet the new clients’ needs? Do you need to establish a physical office or are you comfortable coordinating operations remotely?

As you’re devising your entrance strategy into the new market, remember that if the growth fails, you will need to exit tactfully to protect the company’s finances and reputation. Expanding services into a new territory always involves risk, but with a thoughtful strategy behind the move, you have the power to set your commercial cleaning or maintenance company up for successful growth.

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