What is the best way to determine if your plans for expansion are feasible?
I am looking to expand my custom jewelry line. Whether that be to outsource to other suppliers or hire additional employees, I'm not sure. How can I determine if my ideas are feasible in the first place? How do I move forward with expansion from there? Thank you in advance for any insight or direction.
when hiring employees it is best to use a 3 to 1 ratio for scaling. So if Natalie's income is 3000 per month I must then have 9000 already set aside or three times the income of the person I would like to hire. Remember you can use subcontracts as well, 1099 workers are a great intermediary to full time employment. Remember that as a hiree you have a responsibility to your employees livelihood, in terms of feasibility I would be happy to speak with at no cost learn your ideas and current standings and provide advise based upon the conversation.
In my opinion, You should first look at your expenses and the profit that your gaining from business. If It is is well enough so you should hire some more employee at this stage.
One more important thing keep yourself involved in business and stay in touch with each employee.
Consider finding some existing markets with similar size to your own and buy into them. Failing that consider joint projects with them and try to work crossover event planning into the mix. Usually your competitors make great allies, or aquisitions.
I would start with Outsourcing , the threat with Outsourcing is inferior product/service if the partner is not right and that has an impact on the brand name..But as most have explained , you need to work on the comparative Financial plan before you take the leap
Kate, You are very astute to ask this question before you start. Too often business owners don't and create more problems for themselves than the fix! We have a very simple method called "tuning your revenue engine." It's a management model that allows you to monitor the cause and effect along your cash flow cycle. But, it allows you to manage it from an operational perspective rather than a financial one. You can get more details in the Resources section of MosaicHUB where we've posted a short video: http://www.mosaichub.com/resources/resource/tuning-your-revenue-engine-2
I hope this helps! - Dino
It is about the nature of the expansion: why are you doing it? If it is about pure Product additions, I would be careful. I would focus on the nature of overall business execution. 3 parts: roadmap to revenue, relationships with suppliers-retailers-distributors, and Customer Satisfaction. You need to look at it across the board.
1. Look a few years down the line and outline carefully where you PERSONALLY want to be -- and then develop where your BUSINESS needs to be to make it happen
2. That will require certain capabilities, that need to be carefully defined -- no more than 5. (If you cannot figure out how to limit it to 5, then you are trying to do too much
3. Then bring it back to 12 months and then the next 90 days, carefully defining where your business needs to be at each of those points to be moving towards your longer term goal -- and also carefully define the strategies required to make it happen. The latter again must be limited to 5 and must line up with the capabilities you said you needed to create to get to your goals.
4. Once this has been created (and there may be a few options) project the financial results, most specifically the cash flow results, from each option. When you decide on one, pull the key numbers from your projections (as well as other key metrics that define daily, weekly or monthly what needs to happen to meet your goals), and then you will have established benchmarks to hit to know you are on course.
Every business depends on plan(black and white) so please add your future hope in your business plan following are the example of business plan:
(0) Market re-search………………………….why?
(1) Market re-search……………………………what?
(2) Market re-search…………………………..How?
(3) Title or name …with respect to name, with respect to business, with respect to location, with respect to era.
(4) Motto…with respect to business.
(7) Mission Statement.
(8) Vision Statement.
(9) Location……with respect to positive and negative aspects.
(11)Finance……..Fix and Running.
(12)Finance Management……with feasibility report in the form of chart.
(14)Business Flow…with the help of flow chart.
(15)Mathematical Model of Production…with cost estimation method.
(16)Promotion Strategy ……..with Probability or regression model.
(17)Risk factor…with your weak points (S (strengths) W (weaknesses) O (opportunities) T (threats) Analysis).
(18)Role of Technology.
I once worked for a company that expanded too soon and went bankrupt. Don't just rely on one set of advisors regarding expansion. Look for people who know the target area and its economy, financial experts focused on your industry, etc. Also, ask successful business owners in your industry who expanded in the ways you are considering: how did they determine their criteria?
1. Do a comparative cash flow analysis using the same sales data for each scenario
2. Understand "why" you are expanding - if you're too busy and turning away clients yet wish to make more money you could always raise your prices, have less clients and make more money.
3. Set clearly defined SMART goals regardless of your decision. Measure your success.
Don't be afraid to fail - just be comfortable on how much of the farm you're willing to bet!
Well, first of all I would conduct a financial analysis of your books to see if & where your peaks seem to land, and figure out the how's & why's of that scenario. It seems to me that this is a 'toying idea' right now, and you are not confident about the idea, since you are asking for input here. Being the smart business woman you are, you KNOW what it is in your 'line of custom jewelry' that you wish to expand - assuming this is a case of 'demand/supply'. IF not, then as others have said before me, analysis your market, niche areas, financials, and give very serious thought to your financial goals and current reality before you make any moves. Research, research, research...Best Wishes!
In my experience the best way to approach this is to experiment with both and see what results. You might initially try and outsource to other supplies. If you do, do it as a test with a couple and see how they do. If it looks successful then focus on that...By testing an idea you can determine how feasible it is with real experience.
The best way to determine is to study your sales records & marketsegmentation , these two are the most important to decide , increasing in sales percentage & the size of market you wish to cover and expand accordingly with the demand for your products with your advertising plans for the targeted markets , will sure give you clear picture to decide . Wish you all the best .
IF you have way too many orders to fill that you will never make deadlines, it's time to expand - otherwise, you've got a successful hobby-business...
You have not given much detail of your challenge. If possible, I would use the fail-fast-fix-fast approach. Try it out in a market or segment where you will get quick feedback whether it is working and where a failure is not fatal. And learn from it: either not do it or do it differently
The best/most reliable way is to get a consult from a strategist or expansion specialist.
There's lots of resources to read online, but nothing will compare to actual experience with this.
Trust me: when it comes to expansion strategies, you don't know what you don't know.
First, create a resource and financial model of your operations/business on a spreadsheet. Identify the path(s) of your product lifecycles, including development & sales if you have (or are going to have) wholesale customers.
Run through the numbers, see when and where cash gets absorbed and when it comes back into your business. If it looks like you have to invest to expand i.e. add resource, be sure your cash flow is enough to meet your supplier and creditor obligations - if not, you may have to capitalize via loans etc.
In the end, you must be able to see that your future expanded operations will provide enough cash to sustain itself.