The vast majority of business owners have plans to grow their company. When you set up a business, it’s natural to have goals for the future that are linked to expansion. The trouble is that growing a venture is not always easy, and if you get the timing wrong, the consequences can be devastating. If you’re thinking about taking the next step, here are some questions to consider before you make a decision.
Are you in the red or the black?
It’s no secret that most new businesses fail, and cash flow issues are among the most common causes. Before you borrow or invest more money, take a good look at your finances. Are you turning over profits, or are you still paying off initial investments or investors? If you have outstanding debts, or you’re struggling to eke out a profit or break even, it’s wise to bide your time. You don’t want to find yourself in a situation where you owe so much money, and you’re paying so much interest that you’ll never be able to climb back into the black. Wait until you’re in profit to expand.
Is there a demand for your products and services?
When it comes to growing your business, you need to consider whether there’s a demand for the products or services you sell. Whether you’re an accounting firm, you own a restaurant, you have a real estate agency, or you run a hotel, you need customers to buy what you’re selling. If you can’t fill your restaurant on a Saturday night, you have appointments available every day at your salon, or the housing market in the local area is stagnant, these are negative signs. Follow in the footsteps of developer, Roger O’Steen and look for opportunities to tap into emerging markets. Mr. O’Steen, chair of The PARC Group, oversaw the development of thousands of new homes after the recession in response to an increased demand for affordable housing. Look for gaps in the market, and focus on products or services that are selling well. If you’ve got a coffee shop, for example, and you’ve got people traveling from blocks away, you might want to focus your expansion plans on offering a delivery service or opening a new cafe in a different part of town.
Are you ready?
Expanding a business is never a walk in the park, and it takes a great deal of preparation and planning. Opening a new branch of a clothing store, for example, doesn’t just require renting or buying premises. You’ll also need to ensure you have enough stock for your business, and that you have a suitable staffing structure in place. If you do need to recruit new employees or increase your stock orders, do this in advance of the planned opening date, and make sure you cost out every aspect of the strategy. It’s also crucial to make sure you’re ready in terms of marketing. If you’ve got an opening event planned, people need to know the date, the time, and the location. Promote your party or launch, and use flyers, social media, and email marketing to drum up interest and draw crowds.
Most entrepreneurs launch businesses with a view to expanding and growing in the future. If you’re thinking of trying to develop your company, it’s essential to get your timing right.