Knowing when and how to grow your business is one of the most difficult parts of entrepreneurship, but these simple steps can help you decide if it’s time to expand. Here is a short guide to your small business growth.
Before expanding your business, you first need to make sure your business can sustain growth and still turn a profit. Examine various aspects of your venture, and make note of a few important things.
1. Consider costs and revenues if you want to achieve small business growth.
If you aren’t making money, it obviously isn’t time to expand. Look at your expenses and revenues over time, and consider if your revenue is rising or falling. Examine each department in your business, and determine which areas are making you the most money, and which are costing the most.
Expanding your business can be a great way to bring in more money in the long run, but it can be a big drain on your cash flow at the beginning. Will your increased revenues eventually outweigh the costs of expansion? Do you even have the extra cash to expand currently? Take a long, hard look at your finances and be realistic about the costs of expansion and what you can take on right now.
2. Look at your employees.
Would you have to bring in new personnel to expand, or could your team handle the added responsibilities that come with growth? Would you lose any members of the team if you expanded? Determine which departments need constant attention, and which can be trusted to finish the task at hand with little supervision.
Consider outsourcing some tasks, such as handing over content management to other companies. Outsourcing will cost money, but it may free up labor hours that could be better devoted elsewhere, which could help to increase your overall profits.
3. Evaluate your market for your small business growth.
Take a close look at your customers or client base. Is your business supported by a few key customers, and, if so, what would happen if they left? How solid is your marketing strategy, and how successful has it been? If you’re noticing a higher demand for your products or services in your market, then expanding, at least to some degree, maybe the next logical step. But you also need to consider if this growing need is temporary or something that appears to be in a constant state of motion.
4. Examine your competition.
Look at businesses offering similar products and services. Find out if they’re expanding and, if they are, see if they’re successful. Determine what you can do to set yourself apart from your competition and ask yourself if that will be enough to keep your business growing. Other things to consider are the areas of your market that are becoming crowded with competitors and things you can do to actively take business away from them. If you’re thinking of offering new products or services, make sure something about your specific offerings will make you stand out from the crowd.
5. Test the economic waters for your small business growth.
After you’re finished evaluating your company, you need to look at factors beyond your reach. How will current economic trends affect your business should you decide to grow? Knowing economic conditions is just as important as knowing the other details listed above. Being able to confidently and accurately predict how changes in interest rates, inflation and more will affect you and your business can make all the difference between a successful expansion and one that fails.
If you determine that it is time to grow your business, there are multiple ways you can start the expansion, from opening another location to diversifying your products or services.
If you’ve successfully grown your business, what things did you consider before moving forward?