I had the distinct honor of being able to speak to a veritable plethora of creative business owners last week at Engage '09. One of the recurring topics of discussion was what the next step was going to be. Most wanted to grow geographically -- do the same thing they were currently doing, just somewhere else. A few were doing things related to their core business, but only tangentially (i.e., a floral designer opening a retail flower shop). Only one person I met with was working on expanding his core business (through vertical integration).
Growing the core business into other markets is an ok idea -- so long as you have saturated your current market and have a road-tested operating structure in place. For instance, if you are a high end stationer serving Seattle, have reached a plateau in sales (but are stable) and find that your staff can handle most, if not all, of the business without you, then considering marketing your product to Portland could be the right move. Too often though, the creative business has neither saturated its market nor has the operating structure in place to be able to enter a new market without risking its place in its existing market.
All things being equal, I am lukewarm on geographic growth. The reason - it ignores the value of the creative business' brand equity in its market and, ironically, undervalues the business' core. Take the same high-end stationer in Seattle. If he/she really is the best high-end stationer in the market, think about how much time and energy went into building the business' reputation both at retail and to the trade. How difficult do you think it would be trade off of that reputation to expand into another business line altogether? Perhaps, graphic design, papery beyond life events (and life events beyond weddings), interior design fabrics (wallpaper, textiles, linens, etc.), and flooring (dance floors, tile, carpets). The new business line would legitimize the core of the stationer's business and thereby support additional expansion.
The mistake is to think that your creative business' reputation will immediately translate into another market. Not to diminish the value of your art, but there ARE other artists already doing what you do in the markets you want to get into. Your art may or may not be superior to theirs, but you WILL have to prove yourself all over again. Which, of course, begs the question, why compete in the same arena again when so much opportunity (and new challenges) await you where you are THE big fish?
For me, it is the difference between growth and expansion. Growth is doing the same thing bigger. Expansion is using the current platform to develop other areas of business, which, in turn, grows the current platform. Know your art transcends its medium. The audience that already loves your work is far more apt to embrace (and value) a new expression than a new audience will the old.