All systems grow: you don't have to be a rocket scientist to grow your business. Get ready for liftoff with these 7 expansion strategies

Entrepreneur, March, 2005 by Julie Monahan

Licensees can be picky, and so should the licensor. Davis of Revitalization Partners recommends choosing a partner who can offer potentially high volumes of distribution. While contracting with a large company might mean a smaller royalty percentage, the potential customer reach will more than make up for it. A good licensing partner should also have

an established reputation for quality and service and an aggressive plan to market and advertise your product. For a check on past performance, talk to other licensors contracting with your selected company.

4. Start a chain.

A restaurant, retail or service business that's easily reproduced and can be run from a distance is great for launching a chain. But entrepreneurs must know exactly what makes the original store work and what won't easily transfer to a new site. "You have to ask, 'How much of this success is tied to me, my location or my staff?'" says Chris Wheeler, managing director of Ballenger Cleveland & Issa LLC in Newport Beach, California, a consulting firm specializing in financial and business turnarounds. Defining operating procedures down to the last detail, sharing staff between locations to establish the company's culture in the new location, and developing a training program for new employees all help start things off right.

Launching multiple locations can present some surprises. When Zoots Corp., an eco-friendly dry cleaning chain in Newton, Massachusetts, opened the doors of its third unit, the company launched a marketing campaign to herald the new arrival. "Suddenly, we had three stores doing three times the business of our first two stores," says Todd Krasnow, 47, chair and co-founder. The company, which had about $50 million in sales in 2004, found it difficult to meet its service standards. To avoid similar deluges in the future, Zoots cut back on big promotions, relying instead on word-of-mouth and periodic advertising.

5. Turn your business into a franchise.

Who wouldn't love the idea of collecting fees and royalties while fellow entrepreneurs expand your business? Once you get past the startup costs--on average, between $125,000 and $150,000 for moderate initial growth of five to 10 franchises per year--franchising is an efficient way to expand brand awareness while pooling the business acumen, financial resources and buying power of multiple owners.

Don't expect a motivated franchisee to make up for existing shortfalls, however. "Make sure there's a market for your product, do your competitive analysis and be sufficiently capitalized," says Andrew Loewinger, an international franchise attorney with law firm Nixon Peabody LLP in Washington, DC. Otherwise, franchisees can be a prickly bunch to deal with. "You might have franchisees who don't want to follow the program, who want to break out on their own or don't want to pay their royalties because they think you're not delivering value," Loewinger says. "It can be a challenge."

Joe Barbat, 29, founder and CEO of Wireless Toyz Ltd., a cellular retailer in Farmington Hills, Michigan, keeps in touch with franchisees through store visits and a company-wide intranet detailing new cellular plans and promotions. These contacts remind franchisees that the company is always there to help, says Barbat. It also helps the company, which brought in over $50 million in revenue last year, maintain sales and service standards.