So You Want to Expand Your Market

Whether you want to increase your market share where you are currently, enter a new geographic market or diversify your services, you need to do your homework before you begin. If you fail to identify the requirements of your prospects and/or clients, you will be wasting your time and related investments.

Part of your fact-finding mission is to learn of your prospects things such as:

  • Where they are located
  • How much they spend on the services that you offer (in a dozen categories from contract labor and legal costs, to computer expenses and packaging)
  • The names and responsibilities of their key managers
  • Their credit rating
  • How long they have been in business
  • Their SIC and NAICS codes (including definitions)
  • How many employees they have
  • Their sales volume
  • Square footage by location
  • Their EIN number, social/business websites, etc. S

Some companies’ databases may contain have more than 300 data fields to draw upon per company. There are various ways to try to get this data, with wildly different degrees of information, accuracy, focus and cost.

But once you have this data, how do you use it in your expansion efforts? Here is an example.

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The ABC staffing company does $10 million in business annually, specializing in placing office service temps. While the staffing industry is growing at about twice the national average, not all staffing sectors are the same, and ABC’s sales have stagnated. Here’s ABC’s approach:

  1. They first identified the companies within their market area (based on SIC/NAICS data from the government and other data sources) that use temporary clerical employees. They concentrated on mid-tier requirement, not 1 or 2 clerical temps, or large users who would likely be served by national accounts or a VMS. ABC is located in a major metro market, and was able to identify some 6,000 companies via this step.
  2. Based on the results in Step 1, ABC’s management decided to focus on expanding its line of business by serving first existing clients and then prospects within their geographic area in new business segments, because, they reasoned, it is easier to add new lines of business with existing clients than selling to new prospects. The new lines of service ABC might be able to offer could include accounting/finance and/or technical staffing. Where necessary, the company might need to add personnel who are experienced in selling and recruiting in the new specialty segments.
  3. ABC could then decide to expand its geographical footprint into new locations, starting with its core staffing specialty and then new niches. As with expanding lines of business, existing clients that that have a presence in the target market region would be an anchor account. Within any staffing niche, there would be numerous subgroups ABC could drill down to, like in accounting/finance from VP of Finance and CFO to A/P accounts and accounting clerks.

With careful planning and appropriate investment, companies can achieve great success in their expansion efforts — and many have. What’s stopping you?

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Michael Neidle

Michael Neidle
Michael Neidle is president and CEO of Optimal Management, an advisor to staffing firm owners and managers.

Michael Neidle

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