Expanding your business is an exciting prospect, but is the time right?
Knowing when it's the right time to expand your business is difficult. Growing too fast could hurt your company financially. But if you are ready to grow and don't take that step, you could be stuck on a plateau. Before you decide to jump forward, you need to make sure your company is truly ready to expand.
Here are six signs that your company is prepared.
High traffic, little effort
If your business receives a significant amount of traffic and your client base is growing – without costly and involved marketing campaigns, promotions, sales, etc. – you may be ready to expand. However, don't start creating expansion plans as soon as customer traffic increases. Watch your profit and demand over the course of several months to ensure it is a steady trend and isn't due to other factors, such as the time of year, the economy or special sales.
You're financially prepared
Before expanding, ensure you have stable cash flow to cover all costs and debts that you may incur with the expansion. Not only will you have large costs to pay, but small things like new equipment, hiring costs and updates to a new building can hurt you financially. Additionally, business loans can be difficult to obtain, so carefully consider the costs and the risks that come with growing your business.
You are committed
Growing your company is going to be time-consuming. Many small details come into play that demand your attention and compete with day-to-day tasks. Evaluate your own personal life and make sure you, as well as your employees, are committed to longer hours, more responsibilities and more challenging projects.
Your customers want you to grow
Maybe you have a large following of customers in a distant location or you've run out of space in your building. Ask yourself if expanding would make you more accessible to current customers and help you gain a larger following. Have customers asked you to grow? If the expansion will benefit your customers, and they will still receive your same high-quality product or service, it may be worth considering.
You have a plan
One of the most important aspects of growing a business is having a plan. A well-thought-out plan keeps customers happy and ensures the quality of your product remains the same. Remember, growing a business entails many large and small details. Without a plan in place, your current service and quality may suffer while you hash out the particulars.
The timing is right
Keeping your customers happy and your cash flowing is important. However, before you make any decisions, honestly evaluate your situation. This may take time, and you need to be patient. Be honest with yourself. If your business truly can't withstand the costs and demands of growing, hold off until it can. If you aren't prepared for an expansion, you won't be successful.
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