#Collaborative post
Contemplating business expansion is a heady feeling.
You’re looking to the future, mentally expanding your product range, increasing the services you offer, growing your sales and your customer or client base, maybe taking on a few extra staff in bigger and better premises.
There are so many things to consider, it can help keep you grounded and on track by asking yourself a few questions and giving yourself honest and realistic answers.
- What do You Hope to Achieve?
Having a clear goal for what you hope to achieve through expansion is crucial for success. It’s too easy to get caught up in the general excitement, and this can lead to your moving too fast or not properly assessing the risks, and generally giving yourself more stress than you can deal with.
So, take a somewhat cold and level-headed approach to decide why expansion is a good idea and exactly what you want to get out of it. Your reasons might include any or all of these:
- Introduce new services or products – maybe you need bigger premises to produce more, or more staff to handle an increase in orders.
- Maybe you need more office space or better storage. Investigate the options, such as flexi offices which can give you the professional space you need without the perceived risk of a long contract or lots of additional business expenses.
- Raise your brand awareness. Growing your business can lead to more people hearing about you and using your services. It can boost your personal and business confidence too, increasing your marketing ability which in turn makes more people aware you exist.
- Can You Properly Finance Your Expansion?
Leave nothing to chance when you’re talking about business finances. Expansion can be a tricky time, leaving you more vulnerable to market fluctuations if you haven’t factored in all the potential pitfalls.
Considering your finances goes hand in hand with exploring your motivation to expand and what you hope to achieve. If costs run higher than you anticipated, contracts fall through for any reason, or one link in your expansion chain breaks, you need to know you can cover those additional expenses.
Minimise the financial risks by adding up all the costs you can think of, then adding as much as you can for unexpected road bumps.
- Have You Allowed for Ongoing Higher Overheads?
As well as accounting for your actual expansion, don’t forget to weigh up any ongoing costs. Hiring more people increases your payroll, bigger or better premises will have a higher rent, more stock inventory requires more storage, with manufacturing or materials purchasing costs also going up.
It’s also possible you won’t see an immediate return on your expansion investment, needing to scale up your marketing and advertising first. Make sure you can deal with any initial imbalance between costs and profits while you grow into your expansion.
- Do You Need Additional Funding to Expand?
If so, being on good terms with your bank manager gives you an excellent source of advice and potential investment funding. You’ll need to be thoroughly aware of your current financial situation, have an up-to-date set of books, and be able to demonstrate your plans. You might have to refresh your business plan writing skills to put together a solid proposal you can take to the bank.
Failing that, maybe family or friends are willing to invest in the business.
Whichever finance route you decide to take, start putting a plan together as soon as serious thoughts of expanding creep into your mind.
- Are You, Personally, Ready?
This is a serious question that deserves serious consideration because if you, personally, aren’t ready for a bigger, busier business, with the possible extra responsibility it will bring, the chances for success are smaller.
It could be that you like having a very small operation, and despite the potential for expansion, you’d rather not. This is perfectly ok, although many people might try and persuade you otherwise.
If you’re dithering about it, go back to the first question and think honestly again about what you want to achieve.
Maybe you’d like to be just a little bit bigger, so maybe investigate storage unit prices for a few extra product lines. Many self-storage facilities welcome small business users and are happy to advise on unit sizes and availability. You can keep your current office or admin setup to minimise any risks.
When you’re sure the time is right, go for it. You’ll have answered all the questions, put together all your plans, got lots of expert and legal advice, and be well placed for a new, exciting, and profitable enterprise.