How to Tell If It’s Time to Expand Your Business
- June 24, 2019
- Martin Young
- 0 Comments
Over expansion is one of the leading killers of growing businesses. Things are going well, you believe you have the finances to open another location, possibly a third, and you are wondering if you should take the leap. Each time you expand your business you are making one of the biggest decisions for your company that you can make. Such decisions should be handled with care and you should evaluate certain key factors to decide whether it is the right time for expansion.
You’re struggling to keep up with business
This is definitely a good problem to have in your company. However, given enough time the problem could really start to hurt your current customer flow. If you have too much business to handle, then you need to consider the point-of-view of potential customers. The more time between picking an item and a sale is more time for a customer to reconsider. You want the purchasing or servicing process to move smoothly and quickly so you can turn those customers into advertisers for your company.
It is important to note that you should be having sustained growth. A booming month or quarter may not necessarily indicate that it is time for an expansion. You are looking for a period of sustained business that you are barely able to keep at bay. You need to make certain that your service or product is something that people will keep coming back to repurchase, and not just a flash in the pan. In such situations, it does not mean you should not expand. You might just need to take out loans for a business expansion.
You’ve had interest from other countries
If a company from another country has inquired about your services then this is a pretty clear sign that it’s time to expand overseas too. You know that your service or products will be valuable no matter where you are in the world so there’s nothing stopping you from expanding across borders. You will need to work out how you’ll allow global payments (look here to find out more about this), translate any text that customers may see, learn about tax laws in the country you’re interested in, and research the demand in your industry. However, the extra effort is usually worth it as you can capitalize on a whole new market.
You’ve prepared a plan
A business expansion should be treated with the same amount of preparation that you used when you opened your business. Once you have completed market research of your new area, determined demand levels, and have secured financing, you are prepared to let your business grow. Some businesses rely on sales revenue to fund their expansion, but it may be more beneficial to explore loans for a business expansion. This creates a predictable amount of payments that you can budget into your existing accounting.
You are running out of space
Whether you are struggling to hold on to enough inventory to sell, or you are filling your office with employees, the business must be going well. A high small business sales volume will lead you to purchase high volumes of materials to continue to keep up with demand. In this scenario, it is important to determine whether you should open another location, or if it would be easier to rent a storage facility. You could even extend your existing office with the help of people like BMarko (https://bmarkostructures.com/shipping-container-offices/) and their shipping container options – that way you don’t have to move your entire office. Essentially, if you have enough employees to where you have a crowd in the bathroom, it’s usually time to expand. Hiring employees typically means that business is good and it is time to give everyone some much-needed space.
You have to grow to keep up with competitors
Are you starting to notice a growth in your industry? If other companies are starting to pop up in attempts to copy your service or product, it is important to not get muscled out of your industry. Once you have confirmed that you are prepared to begin the expansion process, make the leap, stay ahead of your competition, and lead your industry in development.
Is it time to expand? If the signs are there, the answer is yes.