Grow with What You Have

This is a tough time to simply run a business, let alone expand. But you might have more opportunities to grow—and more resources to do so—than you realize.

It all goes back to a concept called “synergistic growth.” Basically, that means you leverage your existing customers, staff, physical location, back-office support, marketing, brand awareness and other assets to grow your company. You just have to “think outside the box.”

The KenTacoHut Way

Synergistic growth is sprouting up more and more in the franchising industry, especially.

One example is the “KenTacoHut.” Those are locations where Yum Brands has combined KFC, Taco Bell and Pizza Hut under one roof. Do they cannibalize each other—or do they bring in more traffic for less money?

While synergistic growth is most commonly seen in retail brands, this has been a viable option for service businesses, too.

A window-cleaning franchise might add grout cleaning or pressure washing. Companies that provide in-home care for seniors could start offering mobility products or specialty relocation assistance. Using their existing skills and assets, these companies add additional profit centers by taking advantage of the systems they have already developed and refined.

A Five-Star Example

A great example of synergistic growth is Five Star Franchising in Utah. The company built a solid franchise system with Five Star Painting.

Unfortunately, their franchisees faced a major problem. Most painting companies don’t do much business in the winter, causing them to lose good employees. So Five Star came up with a second franchise business, one that hangs Christmas lights, wedding lights and other features—jobs that franchisees could do with their existing teams and equipment.

Five Star was able to grow this way because it leveraged two of its own existing assets—a highly skilled call center and a marketing department that had a deep understanding of its franchisees.

(Franchisees, you don’t have to wait for your franchisor to develop these partnerships. If you identify synergistic ideas, take them to your franchisor. They might further refine and develop the ideas to make them work even better.)

One word of caution: However you decide to expand, you should always start with a written plan, including financial projections, before making any decisions. With synergistic growth, it can be tempting to just jump into a new project because you’re using your existing team and assets. But a business plan is as essential to building a business as it is to starting a business.

Believe it or not, growth is not always good. You must be prepared for it, both systematically and financially, in order for it to work for you. As Winston Churchill said, “He who fails to plan is planning to fail.”