Want to Expand Your Small Business? 6 Things to Ask Yourself First
12 Feb, 2018 / Comments: Comments Off on Want to Expand Your Small Business? 6 Things to Ask Yourself First / By William Mahnic
When you first started your business, it was most likely very small. In the very beginning, it might have been just you, or perhaps you had one or two additional people. Eventually, you may have added a few more employees as you began to turn a profit. Now that business is good and your cash flow is steady, you are considering expanding your small business. The idea of expanding is an exciting one, but it can also be a challenging time. Expansion requires careful planning and should not be done without first making some considerations. Here are 6 things that you should ask yourself first if you really want to consider expanding your small business.
1. Can I Afford to Expand?
Expanding your business may help to increase your revenue, but it will also cost you some money beforehand. Expanding your business is an investment, and you will need to spend money in order to make money. In the process of expanding, you may accumulate some massive bills well before you see the rewards. You should always consider your expenses beforehand. If you are not generating enough profit, expansion could be too risky and could leave you with some significant debt.
2. Can I Handle the Business I Already Have?
Before you begin to plan your expansion, you should be asking yourself if you can even handle the business you already have or if new work would overwhelm you. You might be dreaming of turning your small business into a multi-million-dollar company, but if you take on more than you can handle, you may quickly find yourself completely out of business. Pushing yourself to work harder is good, but not if you get in over your head. Don’t bog yourself down with new projects and additional work if you can’t handle what you’re already doing. It may be best if you wait until you have the time and the resources to handle the challenge.
3. Have My Competitors Expanded?
You can learn a lot from your competitors. By watching your competition, you can gain valuable insight into the market and can give you a leading edge. You can learn from their failures and their successes, and figure out what might work best for you, and it can help to show you how you can benefit your target customer base.
If your competitors have already begun to expand, you have a few options. You can wait to see how your competition does to see if there really is a demand. You can follow your competitors’ leads and use their expansion as a way to stimulate your own idea. You can also play off of the success of your competitors by expanding into a new area. In doing so, you are not introducing a brand-new idea so you most likely will not have to spend as much time and money showing your customers what you have to offer.
4. Am I Motivated?
While your business may be about the bottom line, getting through an expansion is not. Sure, the bottom line matters, but expansion will present a variety of obstacles. In order to get through the challenges thrown in your path you will need to remain motivated. You and your current team will need to be prepared to tackle these challenges head-on. If you lack motivation, you may struggle to make it through the expansion and find yourself with the success you are hoping for. As the business owner, you are going to be taking on a significant amount of new work. If you have people who work with you, you will need to make sure that they are prepared for additional responsibilities as well.
5. Will I Be Able to Handle Reduced Demands?
When thinking about expanding, you will need to consider your timing. It is important to keep in mind that any downturn in the economy can have a significant impact on customer demand. If people are becoming more conscious of their spending and spending less overall, are your goods and services going to be affected? If you cannot support your business in the event of reduced demands, the timing of your expansion will need to be considered carefully.
6. Am I Compromising My Original Vision?
When you first started your small business, you had a vision or a passion that was driving you. Expanding your small business can take you away from what originally drove you to start it in the first place. If you are the creative type, expanding may mean that you are less hands-on than you used to be. You might be making more money, but will you still be happy? If this is an adjustment or compromise that you are not willing to make, you will need to seriously consider if expanding is the right idea.
Expanding your small business is a big decision that should not be taken lightly. Whether you are considering taking on more work, opening up another location or expanding in some other way, make sure that you thoroughly think through your decision. By taking the time to ask yourself these important questions and answering them honestly, you will have a better idea of whether or not now is the time to expand your small business.