Things you should consider before expanding your business
The prospect of expanding your business can feel very exciting; however, it would not be without risks if you were to follow it through. Therefore, you should remember to temper your excitement with a dose of realism – whether you are interested in opening a new online or retail store, win new clients, or add to the variety of your company’s products or services.
Before you put an expansion into action, you need to both think about and plan it properly. Skimping on this preparation could risk you ruining the business that you have carefully built up.
Could you expand without sacrificing the existing business?
Naturally, you would be delighted if your company develops a turnover of many millions of pounds. However, you shouldn’t be too quick to assume that this kind of growth will happen instantaneously if you are still struggling with the much smaller company that you currently run.
Is it often difficult for your firm to make financial ends meet? Do you find that your relationships with existing clients and customers are frequently strained? If the answer to both questions is “yes”, then you should wait until you have mastered these challenges before turning your attention to the possibility of an expansion. You should also probably disregard the expansion option if you intend to sell the company within five years, Entrepreneur advises.
Can you afford the initial financial outlay that would be necessary?
Yes, an expansion could help you bring in more money by exposing your firm’s offerings to more people. However, that extra money won’t start coming in until after you have heavily invested in setting up the expansion. You would need to account for various expenses cited by Business 2 Community – including those of opening a new base, recruiting, and the extra marketing expenses.
Fail to heed the warning about these costs and your business could end up faced with debt that it has difficulty paying off. Hence, if your company isn’t turning a profit or you lack other means of accessing the required funds, you should probably rule out expanding… for now. Otherwise, you could face an even longer wait for profit to emerge.
Would your team be able to take on the challenge?
Let’s assume that you have looked at your funds, time and opportunities and ultimately decided that, yes, all three could effectively smooth your path to your company’s expansion.
However, there might still be a weak link if you haven’t thought carefully about your company’s current workforce. Extending the firm’s reach will bring additional daily challenges for which your team’s previous experience might not have adequately prepared them.
Your team would need to be suitably motivated and committed to handling these new challenges. Your workers might also need to upgrade their skills base – and our courses in sales training, leadership and management, business development, and more can help do just that. You can call us on 020 3859 0707 to learn much more about these courses and how else we can assist your business.