The goal of every small business is to eventually expand. You do not want to do this without thinking about everything that could happen. Several things need to be in place to have a successful expansion. Here are some ways to know the right time to expand your small business.
Positive Brand and Customer Perception
Your brand and the perception consumers have of your products or services are key for any small business. You want to expand only when you have a positive and established brand that is connecting with consumers. You also want to ensure that customers have a positive perception of your business as a whole. This will ensure customers are willing to expand with you instead of just moving on to the competition.
You Are Having Problems Fulfilling Orders or Requests
Your business will likely come to a point where it becomes difficult to fulfill customer orders or requests. This means more business is being thrown at your company than can be handled by your current operations. You will need to expand when this happens. You will need to expand your logistics and possibly production departments or consider outsourcing some of the fastest growing areas to larger third-party companies.
Your Business Operations and Employees Are Sound
Expanding your small business requires a large amount planning in order to avoid major disruptions and mistakes. You do not want to start expanding until your business operations and employees are sound. This means your company does not have constant problems with workflows, turnover or missed deadlines. Sound operations and infrastructure will give you the base necessary to expand without unintentionally collapsing the small business.
You Have Access to Extra Capital and a Positive Cash Flow
You need to have a positive cash flow for a couple of years before you should even consider expanding. Additionally, you want to have access to extra capital before starting any expansion. This means using a company like Advance Funds Network, or AFN, to get a line of credit, business loan or cash advance to cover any unexpected costs. This is important because the expansion might require more capital expenditures or hiring that originally thought. AFN can provide your business with fast funding to make any expansion easier.
Consumers Are Asking For More
It is definitely time to expand your small business when consumers are asking you to do so. Customers might be asking you for a wider range of products, larger inventory levels or more storefronts. If this is becoming a trend, then expansion is the answer since you know the demand is already there. Be certain to carefully gauge the demand to ensure it is genuine.
Your Competitors Are Growing Fast
Every small business owner has to watch the competition and industry carefully. You do not want to fall behind when it comes to the competition. If you notice a competitor is suddenly expanding aggressively and you have the resources, then it is probably time to expand your small business. You want to expand enough to match the size and capabilities of your immediate and most threatening competitors. Do this only if you are certain the competitor is drawing away customers and you have the capital to pay for the expansion without harming the small business.
Your Business Has Been Stable For A Few Years
Another sign that is likely time to expand is if your small business has been stable for a few years. Two to three years of stability is what most people look for. This means that your business has been making a profit, avoiding major legal problems and not experiencing financial issues for all that time. This is important because trying to expand an unstable small business can lead to many problems and could ultimately cause the company to fail.
You Have No Room Left
A final sign that you need to expand your small business is if there is no physical room left. Your storefront might be too small to accommodate customers, staff and products. Your office might become too small to handle equipment, servers and new employees. This is when you want to expand and move into a larger space. Expanding in this way and choosing the right location will make it far simpler for your business to grow in the future as well.