One of the scariest things about setting up your own business is knowing when to start expanding. Expansion means that your business has grown to a level where you can no longer handle everything yourself, and have to put your trust in others as you employ people to help you. This is never easy when you’re used to doing everything yourself.
Even if you already employ many people, that next step to expansion can be very daunting as it’s always faced with a level of uncertainty. So when is the right time to start expanding?
In all businesses there are some factors which will help you to decide whether or not it’s time to take the next step. If you find yourself working long hours with no time to take a break, then that’s a good indication that you need to take that you need to look in to how to best expand your business.
When to expand your business
Before you consider expansion, there are many things to take in to account. There are no certainties in business, and some expansions do more harm than good, but if you consider the state of your business and how it’s operating, you’ll be best placed to make that decision at the right time.
- All businesses hope to build up a good customer base of people and companies who buy regularly from them. If you have regular orders or contracts, and you notice that you are selling to the same people over and over again, then you have a solid base to keep your business running. You do, of course, need to maintain good customer service and look after these customers, but if you get a regular income, then you know you’re on the way. If you have a steady income, then taking on more customers may start to put a strain on your existing staff infrastructure. Depending on your type of business, you may now want to expand your workforce or premises to help you increase your customer base.
- If you are being approached by new customers, or being asked if you offer your service in a different area, then that’s a very good indication that you have built up a good reputation and there is a growing market for your products and services. A lot of businesses can market their products nationally and internationally, depending on what they sell, and if you pay attention to your customer enquiries, there may be a reason for opening another office in another part of the country. In fact, if you find yourself turning customers and business away, you really do need to look into expanding.
- If you’re working from home or hire space to work from, there will come a time when you will need more room. Some businesses who work from home have space for one or two people to work with them. If you find you need more help, then you need to expand to bigger premises. If you hire space or run a factory, then when you run out of room, it’s time to find bigger premises.
- If you have a well drawn up business plan, then you will have included a plan for growth. When you are hitting your goals and your plan is going well, you should know when the right time to expand is. Hitting your planned targets and achieving your goals is a good indication that you need to take the next step in order to reach your next set of business goals.
- Cash is something which can often be overlooked but it is an essential part of any business. It’s no use expanding if you don’t have the cash to cover the extra overheads you’ll have as a result. You’ll need to make sure that your business has a good enough turnover to pay for extra staff or space, and if you take out a loan to expand you’ll need to be able to pay that off too.
- A lot of businesses offer more than one product or service. Starting off with a small customer base gives you the chance to test out your business to make sure there is a market for it. With most companies, there will be additional services you can offer to supplement what your customers already buy. If might be that your customers are asking if you offer additional items, so keep track of things like this. If you do, you can quickly identify if there’s anything which is regularly being requested, and that’s your cue to look in to offering your customers more.
Once you’ve identified that the time is right to move your business on, you then need to put together a plan to put it all in to action.