At this point, your business is out of the weeds. You recognize what you need to do in order to be successful — and certainly the things you need to avoid. But even for a business that is seemingly doing all the right things, you still may question if expanding is the right move.
The prospect of expanding your business can be both exciting and nerve wracking. But, if the signs are present, then this may be the right time to grow your business.
Is your business no longer able to fill customer orders in a timely manner? Are employees having difficulty keeping up with production demands? While these are problems, for sure, they are also signs that your business may need to expand.
Your business has been profitable for three or more years.
Understanding the difference between a seasonal or temporary increase in business and a prolonged profitability is crucial. If your business has been able to sustain a profit for at least three years that may be a sign that your business is ready to expand.
You’re unable to keep up with production demands.
This is very much a double-edged sword. On one hand business is clearly going very well; orders are coming in; and demand is high. On the other hand, if you are unable to keep up with the demand, you risk missing deadlines and losing out on future business from unhappy customers. In order to keep up with demand, expansion may be an option.
Business has become stagnant.
It may seem counterintuitive to expand business when growth has slowed. However, many times businesses become stagnant by failing to look to offer a new service or product. By expanding your business you are able to open up to new markets and revenue streams.
Not every sign telling you it’s time to expand is going to be coming from within your own business. You need to look outward as well. Be aware of the marketplace and what your competitors are doing.
The marketplace is changing.
Markets are constantly evolving, which is why it’s important to always have your finger on the pulse. A new product or service may come along that forces your business to expand if you want to keep up.
Competition is expanding.
It’s not always wise just do something to keep up with the Joneses. However, if your direct competition has expanded business offerings and is now taking away your customers, you need to — at the very least — consider expanding your business to regain these customers and attract new ones.
Is expansion the right move, right now?
Only you can answer that question. Expanding your business is a big decision, and not one to be taken lightly.
Whatever decision you make, it’s important to weigh all factors and perform due diligence to understand the risks involved. With an understanding of upcoming trends, you can help put your business on the path to success, while monitoring the signs to see if expansion is the correct decision for your business.
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