4 Things to Consider Before Expanding Your Business
Expanding your business can be a challenging time.
This story originally appeared on Personal Branding Blog
Expanding your business can be a challenging time. When you're opening a new store, taking on new clients or looking for ways to grow the number of products or services you offer, you're going to feel like you're under quite a bit of pressure. However, if approached appropriately, that pressure can push you to be even more successful.
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Getting through an expansion requires proper planning. Before you consider growing your business, there are a few crucial steps you need to take if you want to come out successful. If you jump headfirst without considering where you're going, you risk losing the entire business -- not just the expansion you were hoping for.
1. Can you cover the business you already have?
Almost every entrepreneur dreams of someday running a multi-million-dollar company. However, entrepreneurs who reach that milestone don't get there by biting off more than they can chew. While you want to constantly push yourself to work harder and do more, you don't want to overwhelm yourself.
If you're considering expanding, first identify whether you're even capable of taking on new work. If you and your team are already struggling to keep your heads above water, don't bog yourselves down with additional tasks and projects. Instead, wait until you have the resources and time to focus on your expansion.
Don't think a second location or a bigger team will help you mitigate the pressure of your work, especially if you're unable to handle the clients and customers you already have. Before you embark on an expansion, consider what additional resources you will need to cover the business you're already taking on.
2. Can you afford an expansion?
If you're a business owner, you know the saying "you have to spend money to make money" is true. The same applies if you're looking to expand. Although an expansion can bring in more money for your business, it won't do so immediately. You need to be prepared to make an investment.
Between opening a new location, hiring a team to run that location and the marketing that needs to be done to get people in that area excited about your business, you'll rack up sizable bills before you ever see money come through the door. If you don't have the cash flow to cover these expenses, you could be looking at some serious debt for many years ahead.
Always check your finances before you make any decisions to grow your business. If you're not profitable or you don't have access to the money you need, expanding is likely too difficult for you. Expanding before you're ready could prevent you from being profitable for even longer.
3. Have your competitors already expanded?
Business owners can learn a lot from watching competitors. Because you share the same target audience, you are likely using similar techniques to attract your ideal customers' attention. This means you're able to use their successes or failures to determine what is likely to work for you.
If your competitors have already expanded, you can play off their success in the new area. Because you're not introducing an entirely new business idea into that space, you don't need to spend as much time or resources trying to educate your target audience about what you provide. By offering your services as an alternative to an already established business, you can scoop up some of your competitors' customers.
However, don't wait too long for your competitors to expand first. The longer a business is established in an area, the more challenging it will be to convince a new customer to switch to your business instead.
4. Are you and your team ready for the challenge?
Successfully expanding your business isn't something you should do on a whim. Even if you have the funds, the time and the space to expand into, if you don't have the motivation, you're not going to do well.
Expanding your business presents you with new daily challenges you may not have experienced before. Both you and your team need to be prepared to tackle them head-on if you want your expansion to succeed. Without the right motivation or commitment from your entire team, you may struggle to find the same level of success.
Be sure to talk with your team before you make any decisions to expand. While you may be the business owner and responsible for the bulk of the work, expanding also means an increased workload for everyone in your company. Make sure they're prepared for the challenge before you make any decisions.
Don't make the decision to expand lightly. If you're considering expanding your business to a new location, or you're preparing to take on new work, be sure to fully think through your decision. With these four steps, you can come to a better conclusion as to whether or not it's the right time for an expansion.