Expanding your business is both a thrilling and nerve-wracking endeavor. For one, you want to be sure that you can handle scaling operations and introducing your products and services to a broader market. There is also the fact that you must make sure your cash flow can support this significant shift, and that you can emerge victorious from the expansion.
Opening in new territories is a challenge, and you must be able to tell accurately if your company is ready for the upgrade. If you are on the fence about whether you have reached that level, you may want to read on signs your business is ready for expansion. Below are a few:
- This is something you are ready for
First things first: You need to assess if this is something you are willing to embrace. Many business owners are content with just being a small-to-medium operation forever since it is aligned with their vision or that’s as far as they can dip their toes into running their business. Then, some aspire for more extraordinary things, taking a leap of faith in bringing their business to a bigger stage.
You need to make sure that you are willing to devote your time, effort, and everything else more than you already are for your business. The first stage of expansions are almost at par with the challenges you encounter when building a business from the ground up, and it still can flop if you are not entirely ready.
- Steady and rising revenue
It is one thing for your business to start earning and another thing to consistently hit targets and maybe even exceed them. While many companies hit a point where they are earning revenue, not all will reach a point where they are making a profit that puts them in a place of opportunity.
The key here is to make sure that things have been steady enough for a couple of years. If you think that you are hitting a surplus and you have what it takes to continue being profitable in the future (not just today), then this is a good sign for you to take your business to greater heights.
- You have an exceptional team
You are not the only one who must be prepared to grow your business—the people under you must be, too. Assembling a team who have the same work values, complementing work ethic, and the same drive for success is incredibly hard to do. If you believe you have this, then it is an excellent sign that you can handle whatever future challenges come your way.
If your team is not already at this point, then are they willing to adjust and learn how to be better with their craft? If the answer is yes, then this is still a good sign that you and your team are ready for this new phase of your company’s growth.
- You have emergency funds ready
Ideally, your business can sustain itself—but when it comes to expanding to new territories, there are many factors you cannot foresee that may call for an emergency fund. You would be surprised at how easily your cash can be swallowed by legal fees, business licenses, rent and utilities, inventories, payroll, and several other factors that come with scaling up.
The key here is being confident that you can survive not just rainy days, but the storms of challenges thrown your way, too.
- Demand for your product is high
Studying the historical trends and other data you have for your business helps determine if you are in the right path of pushing for expansion. Also, it is helpful to take note of the following:
- Is your customer retention rate high?
- Have you seen numbers that show your products and services have demand in the new areas you are planning to launch in?
- Are there things you should modify in your existing inventories to better suit the other market?
- Are your customers asking more from your product?
Take some time to ask yourself these questions and make sure you have concrete answers for them.
- You have the time to focus on the expansion
Many things are going on in a business at any given time. If you are dealing with other significant things, like planning a new product to launch or crisis management, then it may not be best to push through with something as big as an expansion yet. Evaluate and project when your open window time could be; that should dedicate the next few months and let you see your growth through until the end.
- You have a game plan
Having your processes in place before the expansion begins is essential to make sure that it will become successful. Your existing company policies should be well-ironed-out, you should have adequate and complete playbooks that are easily understood by new hires, and there should not be large, unresolved issues sticking out.
Otherwise, these problems will be inherited by your new location—and you do not want to deal with even more headaches when you are in the middle of expanding.
Final Words
Preparing for this next chapter in your business is crucial for success. Not preparing for it could spell chaos for your business’s growth plan. Have you been noticing these signs in your company? Perhaps it is time to take flight and see where expansion takes you. Good luck!
Guest post courtesy of Ralph