Expanding a business involves hard work, dedication and a strong capital base. Before you go ahead, contemplate on whether your business is ready for growth and also whether you and your team are committed enough to make the effort and invest time and money to do it.
You should venture into a business after considering all the pros and cons of the project.
Whether it is a small or large business some factors should be considered if you want to expand. Building a long term strategy will be imperative for the success of any business venture.
Below we have given a few tips to grow your business. In the words of an American entrepreneur James Cash Penny, “Growth is never by mere chance, it is the result of forces working together”.
Evaluate extensively your motive for expanding your business and also what impact will it have on your personal life.
Some personal considerations are:
- Do you possess the required skills and expertise for expansion
- Consider the short term as well as the long term goals and objectives of the organization and also whether these objectives will interfere with the earlier ones when the business was set up.
- Time management i.e. will you be able to devote more time for your business?
- Will your time and effort be worth the return on investment?
- Do you have personal resources required for expansion?
- Are you ready to take the risk?
- In case your business is home based, will it interfere with your personal life?
Some operational considerations have to be considered before you consider expansion:
- Availability of Credit: Credit is a vital tool when it comes to business expansion as more capital will be required apart from profit. Evaluate the cost of credit you can arrange from financial institutions like banks or other lenders. Since credit offered can be for long term or short term and at different rates of interest, a business owner needs to estimate and assess the cheapest credit and the flexibility provided for repaying the loan.
- Enrolling More Employees: Expansion might require additional labor force. Determine whether the company will be able to bear the salaries and other costs for hiring extra human resources.
- Increase in Profits: More profit is a motivation for expansion. A stable business if expanded will lead to success and an increase in profits.
- Legal Obligations: Tax obligations should be considered at the time of expansion in case of a business partnership turning into a limited company. Evaluate whether the business will be able to meet additional costs like registration of the company, certification of products and taxes.
- Study whether the competition within the Industry is healthy and legally acceptable
- Study the aspect of space: Expansion might mean requirement of extra space or relocating to another place. Determine the extra cost and also whether it will mean violating environmental conservation rules
Good Customer Service & Communication
Organizations initially tend to communicate better with their target audience thus offering good customer services. But they fail miserably in the expansion phase as they now pay more attention to other crucial aspects of business.
It is advisable to build a good rapport with the intended target group. Win them over with a clear and effective communication strategy thus creating a clear picture in the minds of consumers. Ensure that you are providing the same quality service you did originally.
As you continue with expansion conduct market studies and focus on the next phase. Online sales being the need of the hour, you should look for web providers and monitor how online sales are being handled by your competitors.
Keep your attention focused on increasing sales. Consider location based and SEO marketing abilities as these will prove beneficial when you grow your business.
Is Your Team As Passionate About Your Business As You?
Business expansion is better if your team shares the same core values. There will be several obstacles when you expand your business but the key to success is to recognize and accept your limitations. Before you make the decision to expand, research your resources and finances carefully.