It’s no secret, we, at The Franchising Company, love entrepreneurs and everything entrepreneurial. We find it absolutely fascinating to watch people succeed in business. We love seeing the variances between the many different types of business owners. But the one trait (if you can call it a trait – it’s almost more of a “sense”) we see the most often among top entrepreneurs is their ability to constantly be challenging the status quo and always looking for the next cool venture to explore.
We’re not talking only about the extraordinary visionaries like Elon Musk or Steve Jobs, we’re talking about the guy or gal who owns the sandwich shop | salon | quick stop | average small business down the street. He or she is constantly searching for new product lines to add, new ways to market, new businesses to be a part of. This thrill of business ownership is what we love about helping people find the perfect franchise.
What we’ve learned along our journey in franchising is traditionally there were two main ways to grow a business. Horizontally or vertically. What we’re seeing more of, and what we’re happy to dive into in this article, is growing a business “synergistically.” (A term we learned from Jeff Elgin in his article for Entrepreneur.)
Horizontal business expansion is the most traditional way to grow a business. By increasing your business. Simply put, sell more of the exact same products or services you’ve always sold. This is mostly accomplished with more marketing, more sales, more capacity, or even market expansion.
Vertical business expansion is a strategy that involves growing your company by expanding your products or services to those that are merely “related” to what you currently do. For example, if you own a roofing company, maybe you start selling trusses or shingles. Maybe you start making your own trusses or shingles. This is vertical expansion.
Synergistic expansion is different. This is an approach that allows you to take advantage of your current business in a completely new business. Maybe they’re related maybe they’re not. But you could take advantage of the same customer base across businesses, or the same employee pool, or maybe even share spaces, or perform joint marketing, etc.
Synergistic expansion is well accomplished by simply “adding” a business to your current business. In our same example, where you own a roofing company, instead of simply installing more roofs, or starting to make or sell products for roofs, you might add a company that does gutters, or siding, or driveways, or even drywall. Thought being, if you own a home and need a roof – you probably need those other things as well. Your companies can share a customer base, they can potentially share employees, you can leverage administration across all the businesses, and you can probably exploit other efficiencies as well.
There is no easier way to accomplish synergistic expansion than buying a franchise business. As a current business owner, you’re busy. You don’t have a lot of time, but you make up for limited time with business acumen and experience. You know how to use your time, and you know how to recognize what you don’t know and hire appropriately. Buying a franchise business is probably great for you because it’s a proven business that just needs a proven operator.
If you’re interested in synergistic expansion, you should check out our other article “You Own a Business. Why Stop at One? Adding a Franchise as a Second Business.”
What franchise businesses might synergize your current business? You can check out nearly 500 available franchise businesses in our Find a Franchise Database.
When you’re ready to learn more about buying a franchise, and to expand your current business and add a franchise, we’re here and can’t wait to learn more about your goals!
