Starting a business is an exciting proposition. It’s also something a lot of people at least contemplate. That’s a big part of why there are so many resources, like new business checklists and even checklists about whether you’ll make a good entrepreneur.
Once you get past that first year or two, though, you face serious questions about how to grow your business. You can ramp up marketing to help drive sales, for example. You can also look at expansion.
If you think the expanding business option is right for you, keep reading for five things you should consider before you take this business growth path.
1. Cash Flow
Growing your business through expansion can prove very expensive. In a lot of ways, it’s like going back into the startup phase of your business. If you’re a brick-and-mortar concern, you’ll need a new location that may or may not need renovation.
That’s a huge investment. You must make sure that your current cash flow can support both the old and new demands. If you can’t foot the bill out of pocket, you’ll need private investors or a willing bank.
2. Workforce
You hear a lot about getting more from the same resources, but that only goes so far when you’re talking about your workforce. You can only push employees so far or ask them to work overtime so many times before they start looking for other jobs.
You need a plan in place for bringing in enough new blood to support the extra work or new location. If normal hiring won’t do the trick, you can look here for information on contract employees.
3. Logistics
Before you invest too much into an expansion, you must consult with your suppliers and vendors. If they can’t match your projected needs, you’ll need new vendors who can.
4. Market Research
A new market means new norms. You must do at least some market research before you target a new geographic area or a new demographic.
What works well in Boston may only produce lukewarm results in Miami. What works for college kids will probably leave middle-aged professionals cold.
5. Set Clear Goals
Business growth isn’t a clear goal. It’s an aspirational idea. You must know what, specifically, you want from the expansion.
Do you want access to a new market? Do you want a 30 percent increase in revenue over the next two years? You and your employees need specific goals so everyone can measure whether they’re on track or not.
Your Expanding Business
Wanting expansion isn’t a good or bad thing taken on its own merits. You must approach the prospect of expanding business with a clear head.
Can your cash flow support it? Does the market research support it? Are the logistics workable?
Then, there is always the question of whether you can hire enough people to manage the extra work. Plus, you need clear goals in place before you start. Looking for more tips on expansion. Check out the posts over in our Business and Finance sections.
