Remember when you first started your business? It may have just been you and your business partner. As your business started to turn some profit, you hired your first few employees and as your cash flows started to be more steady, you are beginning to think about expanding your business.
As much as its exciting, expanding your business can also be very challenging. It requires a proper planning so that you can pass through the pressure successfully. You will need to consider where you’re going if you do not want to risk losing the entire business.
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Are you meeting your goals?
If you have not evaluated your business goals in a while, you should evaluate your goals on a more regular basis. Your brand may have a good reputation or make great sales, but that does not necessarily mean you can expand your business right away. First, you need to evaluate if your business has surpassed or at least reached the current goals. If you have not met your targets for the previous period, it may not be the right time to expand your business.
What is your growth plan?
Once you make sure that you have reached all current business goals, you can start planning your expansion. If you’ve never made a growth plan before, it essentially addresses a few key components such as:
- What level of growth can your current processes and assets handle?
- Who is your target customer and how can you reach them?
- Which of your product or service that is most profitable?
Have your competitors already expanded?
As a business owner, you should start by evaluating your competitors. Since you share the same target audience, you are likely using similar methods to reach your potential customers. That also means you can determine what is likely to work for you by using a competitor’s success or failure.
If your competitors have already expanded, you might want to do a SWOT analysis on whether you should expand your business as well.
What is your cash flow like?
Growing a business costs money. You may need to stay patient until the sales catch up with the new investment. Before growing your business, you need to consider whether your business is in a good condition to generate revenue or profit. If it is better structured for profit, then keep going on your expansion plan. If your revenue minus costs hardly generate a profit, growing a business might be too risky right now.
Are you and your team ready for a new challenge?
Lastly, once you have all the resources you need to grow your business: a thorough plan, healthy cash flow and funds, you need to determine the state of readiness of your team.
Keep in mind that growing your business will present you with new daily challenges that you and your team may not have experienced before. That being said, you and your team need to be prepared to face and tackle those challenges if you want your expansion to succeed.
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