Any entrepreneur who's been in business a few years knows the feeling. You've reached a certain plateau-you've expanded the business as much as you can without adding on to your building or opening another location. Sales are up, profits are tidy and customers are hinting they might like to see you do more. You are decidedly antsy; you may even be downright bored. You want to grow, but the question is how?
There are many options. You could franchise, get into licensing, acquire another company, form a limited partnership, spin off your original business, start a different company or, if you own a retail store, open a second location. If your company is really ready to take the next step, one of these options is probably ideal.
But however you decide to do it, growing your business for the right reasons is key. Ego shouldn't be a major factor in your decision; neither should boredom. According to Donald Reimer, president of The Small Business Strategy Group in Southfield, Michigan, growing for the sake of growth is perhaps the worst mistake an entrepreneur can make.
"Sometimes the [true] entrepreneur feels he or she should take advantage of every opportunity that presents itself, but that could be devastating to a company," says Reimer. Some other misguided reasons to expand: Your main competitor is growing, your friends urge you to, or you want to make more money-fast.
What are some of the right reasons to grow your business? "The decision to grow should be based on whether the market is there to support the growth," says Charlotte Taylor, president of Venture Concepts, a Washington, DC, company that specializes in growth issues of small and midsized businesses. Are you going after a flourishing market or tapping into a new, promising niche? Then chances are growth is a good idea.
Many experts recommend hiring an unbiased third party to help you assess the business before deciding to grow. Awareness of your company's strengths and weaknesses is essential to planning healthy growth, but as much as you'd like to think you can be objective about your company's growth, you can't possibly be. "Smaller companies often don't have a board of directors or advisors to bounce things off," says Reimer. In these cases, Reimer strongly recommends hiring an outside consultant to guide you through the process. You need someone with a fresh perspective to critique your strategy.