Partner Article

Your Business: 8 Indicators that it’s Time to Expand!

Kudos to you – you made it through stage one – the start-up phase. Of course, instead of sitting back for a while and reaping the benefits that your money, time and sweat went into, your entrepreneurial spirit is urging you to drive forward and expand!

Expanding your business is an exciting, exhilarating and rewarding time but the ‘right time’ should be an intrinsic part of the decision. If you can relate to 4 or more of the points listed, it may well be that the time has come for you to expand!

1.You have a loyal customer base

If you already have a strong base of existing customers that regularly return to you, you should be pleased – but also ready for the next step! This activity is an indication that they are pleased with the quality of service you provide, and proves that there is an ongoing demand for your product or service.

2.Customers are coming to you

You may have reached enough momentum where you find that you no longer have to approach customers to do business- they are now approaching you. If you have ever been approached by a customer in a new location that has asked if you will be providing your offering in their city – consider it. When these questions are coming directly from the customer, it’s a genuine request and the expansion should be seriously considered!

3.You have been profitable for more than 3 years

If you have only recently seen a surge in profits, that unfortunately, isn’t enough for you to start looking to expand. Every business experiences seasonal peaks throughout the year. But if you have been profitable consistently, it’s a sure fire sign that your business model is successful and growth is on the cards.

4.You have great employees

The question that you need to be asking is ‘Can my team handle more?’ The secret to progression is to come up against new challenges and demands and adapt to them. You need to be confident in your staff’s ability to confidently encounter new work and even new responsibilities. If you are confident that members of the team are ready to step up and become senior, it’s likely that you have a good support base for a successful expansion.

“I hire for attitude and hope the skills will follow,” says Emma Jones, co-founder of StartUp Britain. In another of her businesses, Enterprise Nation, Emma recruited a new team member that she had met at a few events. “We had a gap for someone with the right kind of attitude and we’ve created the job for them. Small businesses need people who can move at the same pace as the company and be as ambitious as the business owners. In a small team, you are working on a mission together. You can’t afford any slackness.”

5.You are outgrowing your premises

Quite often, you just need to expand in terms of your location! If your customer base has increased, or the work load has grown so much that the amount of people required to handle the work load won’t fit in your current office comfortably, it’s time to move on to pastures new. Don’t leave it until everyone is sitting cheek to cheek, if the amenities such as parking are becoming stretched – it should already be on your mind!

6.You can see an opportunity for related products

If your initial product or service experiences strong sales, then it could be time to expand into related products. For instance, many hairdressing business often expand into beauty and holistic therapy and selling related products such as styling products and hair brushes. Telecommunications businesses often develop an IT side of the business as the 2 are so closely related.

It’s highly likely that there are related offerings that you could tap into that may not require you to front an initial investment!

7.Your industry is expanding

Paying attention not only to the demand for the industry, but to market trends and regular analysis will give you valuable insight. If the industry that you are in is growing, it is a good indication that your business will begin to grow too. Looking at locations further afield may allow you to create a monopoly, giving you a competitive edge.

8.You have a clear vision for growth

It’s absolutely critical that you believe in your businesses potential to grow. It is up to you to have the confidence that will be instilled in others; your employees, partners, buyers and customers. As corny as it sounds, if you don’t believe in your business then it will be a difficult task to get others to believe.

Developing a solid growth plan underpins this vision as often planning is the key to success. Many start-ups don’t make it past the 5 year mark, but it has been proved that creating a growth strategy to ensure the company is sustainable long term.

“Given the recent economic turbulence, many businesses have room to expand, but are concerned about the financial risks involved. We created our software specifically for businesses looking at expanding. It’s a software solution for capital budgeting, financial modelling and valuation. It uses discounted cash flow methodology, international accounting standards and best practice to allow its users to calculate the risk involved with any expansion” explains DataPartner

How do you fair against these markers? Before making a decision, take a look at the operational systems within the business – do you have regimented, well documented processes? These systems will allow to replicate your business model when it is scaled up whilst also maintaining a high level of quality – of the utmost important when it comes to the customer base that have been the catalyst for the journey.

This was posted in Bdaily's Members' News section by Rebecca Moore .