If your small business has been successful for several years and is steadily turning a profit it may be time to consider growing your business. You can grow in several different ways such as hiring a few additional employees or adding a new service or product lines. Maybe even purchasing a larger office space. Opening a second store in another location is always a great asset. However you do it, you have to be certain that you consider all the risks carefully and form a strategy before you grow your business. Otherwise, you could expand too quickly or in the wrong way and lose a large amount of money.
Look at Your Competitors
Before you expand, you need to take a very close look at the market to make certain it can support your new products, second location, or the additional expenses you’ll incur by hiring more employees. One way of doing this is to look at what your competitors are doing. Are they expanding, or are you reading news stories about businesses closing and people being let go? If other businesses are growing, it’s a good sign. But if companies similar to yours are going out of business, it’s probably not the right time to expand unless there are other factors, such as if you have no direct competitor in your location and you are constantly selling out or completely booked.
Make Use of Resources
There are a number of different resources out there for small business owners that you can take advantage of. Be sure to check these resources for advice on how to grow your business. They might provide some insight into expanding that you hadn’t thought of before, plus there are plenty of case studies out there that can help you decide if it’s the right time to grow. Much of this support for your business is online and free, so why not take advantage of it?
Before you do anything, you should run a number of different scenarios to see how your expanded business would fare in various economic situations. Could you stay in business if you added two additional employees, only for the market to crash in a year? What about in two years? Making up these projections does require a good amount of work, but they can be very helpful in deciding if it’s time to grow or not. You’ll be able to have an idea of what the future will hold for your business. Just don’t assume that your projections are going to be completely accurate, since you can’t account for everything.
Be Ready to Commit
Some business owners think they’re ready to spend the resources needed to grow their businesses, but once they start, they see what they’re spending and get nervous. While growing your business there will have been periods where you have invested a good amount of money and other resources but aren’t yet seeing a return on that investment. You have to trust that you’ve made the right decision and stay firm in your decision to expand. If you don’t, and start trying to pull back or cut corners you won’t only end up wasting resources; you could end up spending more than you would have if you had committed fully to expanding.