As a smart small business owner, you have a plan for future growth. As you gain success with your business, each step of that plan – whether it is moving from a home office to a rented space or hiring a new employee – needs careful consideration and, sometimes, a leap of faith. Making too many changes too soon can backfire. On the other hand, if you are too slow to change, you can miss out on some great opportunities in today’s global marketplace.
Signs your business is ready to expand
But how do you know when your company is ready to expand? Here are five signs:
- You have met your initial goals.
Take some time to review your original business plan. Taking into consideration that you may have switched gears a time or two, have you been able to fulfill your projections?
Examine your performance and results. What measures do you have in place? Sales are, of course, one way to measure performance but so is feedback from clients and from your employees. If there is a specific goal you have not met yet, do you need to postpone your expansion until it has been met?
Meeting and even exceeding your goals can give the confidence to take that next big step.
- You have done your research.
If you are considering expanding into a new market or adding one or more locations, you must do your homework first. As many a small business owner has come to find out, what works in one place does not necessarily work in another place – at least, not necessarily in the same way. Rushing to expand your business without studying the new market can have devastating results.
Develop a detailed marketing and sales plans that considers your competitors and your customers, as well as a product plan and an operation plan that deals with expenditures, both planned and unplanned.
- You have the capital.
A smart small business owner keeps a close eye on the bottom line, monitoring all expenses and all returns on investments. Before you grow your business, be sure you have the finances in place to secure its success.
Growth costs money. Since you may not see profits from a new expansion for several months, you need to have the funds needed to carry you through until then.
- You have the customer base.
Here is one of the most encouraging signs you are ready to expand your small business. Are customers coming to you now instead of you just going after them? Is your repeat business strong? This is a great indicator of growth potential.
If you feel you have developed a momentum with your customer base, do you have the means to offer them the quality and service they expect? If it is becoming harder to keep up with your customers’ needs, your service may suffer. Perhaps you need more space and more equipment to better handle the workflow.
- You have the team in place.
For many small business owners, this is the most difficult step. Growing a business may mean that you have to relinquish some of the control of day-to-day responsibilities. If you have gotten to the point where it is difficult to get everything done in one day that you used to do, you probably need some help.
Do you have a responsible already team in place? If not, it is time to evaluate what aspects of your business you can delegate and then to hire team members to take on those duties. Don’t wait until after you have already expanded or you will find that you are very quickly overwhelmed with even more work.
As your business grows, be ready to take on a more supervisory role and less of a hands-on role in certain aspects of your business. Without a good team in place to execute it, even the best business idea can flop.
Still not sure you are ready for growth? Don’t feel you need to make changes all at once. Make a new plan that offers gradual change instead of a radical change. Hire a new employee or two before moving into that new office space, for example.
Try that new product in a test market before fully introducing it fully into your produce line. Talk with people you trust who have made similar decisions with their businesses to see what they recommend.
In his book Built for Growth: Expanding Your Business Around the Corner or Across the Globe, Arthur Rubinfeld draws upon his experience with Starbucks to say that every company should have a solid plan for growth. He advocates that the plan has a series of checks and balances and that it falls back on good old-fashioned customer service.
Like many business decisions, growing your business can depend on good timing. When you grow too quickly, you can easily overwhelm your current structure. Wait too long and you can be left by the wayside as a competitor lures away your customers. Are you ready for the next step in your business?
If you would like more information, the Small Business Administration offers free classes, both on-line and on site, for small business owners. Visit http://www.sba.gov/tools/sba-learning-center for details.