If you are like most entrepreneurs, you are packed with so many ideas that you can’t wait to put them into practice. So when your business is successful, your first thought is “Woo-hoo!” and your second is: “Now is the time to grow up.”
Not so fast. Are you Really ready for business expansion? Here are 10 signs that it’s time to expand your business.
- You have a loyal customer base. A strong frequent customer base is a good sign. It indicates a continuous demand for your products or services, as well as satisfaction with the quality of what you do or sell.
- Clients ask you to grow. Are out-of-town visitors begging you to open a location in their cities? The owner of a womenswear boutique I know successfully opened a second location after noticing a steady stream of shoppers traveling from more than 50 miles away, telling her they wished to have a store like hers in their neighborhood.
- Your business has been profitable for at least three years. A recent increase in earnings is not necessarily sufficient to justify expanding the business, it could be temporary or seasonal. However, stable profitability is a sign that you are doing something right and that your business model will work elsewhere.
- It has a strong team of employees. To handle growth, your people need to be ready for additional work, new demands, and new challenges. In other words, they need to act together. You’ll need employees who can step up and take over a second location, a new product line, or a great new account. If you have these workers in place, your chances of a successful business expansion improve.
- Your industry and / or market is growing. You can handle the best repair shop of typewriters on the planet, but this is an industry that is definitely disappearing. However, if your industry is expanding, chances are your business can, too. Similarly, if you are serving a growing market (such as Hispanic teens), your chances of successful business expansion are better.
- It has a constant and positive cash flow. You may be selling record amounts of your product or service, but if you don’t get paid on time or manage your cash flow wisely, you won’t have the financial base you need to finance your business expansion.
- You have more business than you can handle. Are you turning away clients or too busy to contact potential clients in a timely manner? Are you and your employees working what appears to be 24-hour days? Assuming this is not the result of poor time management, but rather high demand, this is an important sign that there is room for business expansion.
- You see a need for related products or services. If your initial product or service sales are strong, it might be time to add to your offerings. For example, if you make and sell a line of baby strollers, you could add different types of strollers, such as jogging strollers, bicycle strollers, or even dog strollers (yes, this is one thing.) If you own From a salon, you could add related services such as waxing, massaging, and tanning.
- Has operating systems running . If your business is still operating from the seat of your pants, business expansion is not yet on the cards. You will need documented processes to train new hires, replicate your services in other locations, and ensure consistent quality.
- You are running out of space. Sometimes you just need to expand to a bigger place. If your employees are sitting face to face, you are tripping over stacked boxes in the aisles and have to take customers to Starbucks for a meeting because there is no space in your office, it is time to find a larger space.
Are you in one of these positions? Then it might be time to expand. It may be time to take out a business expansion loan to get the working capital you need to grow.