There’s really no perfect time to expand your business. It’s a process that involves as much risk as when you first started. Having said that, there are things you can do to make sure that you are as ready as you can be, and you can bring down that risk to a minimum. If you own or manage a business that’s on the cusp of expanding, here are a few things you should remember.
Loyal Customers
Revenue is not the be-all and end-all of business success. It is a big part, no doubt, but even if you do perform consistently well in terms of sales, without a loyal customer-base, it would still be a big risk to expand. On the other hand, a steadily growing loyal following is more promising, even if the sales numbers are just well-above your break-even point.
More than anything, having a loyal customer-base means there is an ongoing demand for your products, and you know you’re doing something right because these customers are satisfied with your offering.
Take this a step further and engage with your loyal customers. Ask them what they like about your business and which parts still need improvement. This will accomplish two things: you’ll have valuable insight into your own customer experience and your customers will appreciate your initiative to reach out and become even more loyal to your brand.
Consistent and Substantial Revenue
Just because you have a positive cashflow doesn’t automatically mean you’re in a position to expand. There are a few considerations regarding revenue when you’re looking into expansion.
The first one is the most important—do you have enough profits saved up to pay for your expansion. Granted, there are a lot of ways to expand, but most of them do need some injection of capital to do. Figure out how much you’re going to need and calculate whether you have enough to do it.
Another consideration is whether your positive cashflow has been consistent. You may have saved some profits in the five years you’ve been doing business but if the last couple of months have been terrible for sales, then you may not want to think about expansion just yet.
Business Overflow
If you’re constantly working long hours and still find yourself too busy too accommodate all the business that’s coming in, it may be a sign that you need to expand. Having this particular problem, you can also look at your processes, making sure that everything is running at absolute maximum efficiency. In fact, that should be your initial reaction to overflowing business. If you’ve worked out that you are already at maximum and more business is still coming in, then you should plan your expansion.
Preparations
Like what was mentioned above, there are many different ways to expand your business. According to Fundera, you can add new product or service offerings to your existing ones. You can also optimize or sell more to your existing markets. You can expand into new markets by tapping into new customers or by taking on a new platform like ecommerce. You have the option to partner with other businesses as well.
These expansions may involve anything from installing a new software all the way to moving to a bigger office space. Create a plan that details what you need for the expansion and what your targets are for expanding. Make regular assessments throughout the process.
