Many small business owners look to grow their company by opening new locations or expanding their operations, but it is important to remember the risks associated with successful expansion. You should consider several things before pursuing a large-scale expansion. Your current operations, how well your wants and needs are met, the size of your team, and how much capital you will need to make it work. There are many reasons why companies need to grow, but sometimes this is necessary because the profitability of the business has begun to plateau. And while some businesses jump at this opportunity and grow rapidly, other companies struggle with growing pains that lead them into difficulties. Below are seven considerations that can help you determine if you should expand your company.
1. Ensure You Maintain Quality
If you’re running a business that has become stagnant, you are probably not going to be successful at expanding it. You’ll need to find ways to ensure that your company maintains a high level of quality. Don’t compromise this quality by spreading yourself too thin. Have time set aside each day, dedicate it strictly to your company, and spend the rest of your time meeting with people who can help the company grow. If your company expands, but you don’t, you will likely see a decline in quality, and your clients will go elsewhere.
2. Keep Your Personal Goals in Mind
You need to think about the goals that you have for yourself, as well as your goals for the business. When exploring ways to boost your company’s success, always consider whether or not it aligns with your goals for yourself. For example, if you want to become a well-known entrepreneur, opening a location in another city or hiring new employees may not be a good idea. Before expanding your business, make sure that it will help you meet your goals as an individual.
3. Consider Your Risk Tolerance
Some businesses don’t need to grow because they are already financially successful and stable. They can function successfully with the revenue they generate from their current operations. While this is a good place to be, it doesn’t mean growth is not an option. When you expand your company, you are taking a risk and should be aware that the risk may not pay off. Before expanding, determine how much risk you are prepared to take to meet your overall business goals.
4. Be Willing to Outsource
As your company grows, expect you will have less time to dedicate to all the tasks associated with running it. As a result, you may outsource some of these tasks to hourly, part-time, or contract employees. Before expanding your company, ensure you have the right employees to handle the work. You must ensure that your company has qualified and skilled employees to provide quality service. This will allow you to focus on other aspects of running your business. For instance, you may hire part-time electrical contractors in Salt Lake City to handle the job if you need electrical services.
5. Determine Your Company’s Positioning
Expanding your company is a great way to develop and refine your company’s reputation as well as enhance your brand. As you grow, keep in mind that your reputation is important to the success and stability of your business, so make sure you maintain it throughout the process. One of the best ways to accomplish this is to consider how others perceive your business. Before expanding your company, make sure you know the reputation that your company carries.
6. Know Your ROI
Every part of a business comes with an associated cost, so consider how you will pay for the expansion. Before you make your decision, determine if the costs are worth it. It is important to explore all available options for funding your expansion. For example, if you plan to open a new location, consider how much money you will need and if there are grants or loans from local governments or organizations that can help subsidize part or all of the costs.
7. Consider the Location
One of the most important considerations is where you will expand your business. You may decide that you want to open a new location, but it is important to understand the demographics and environment of the area. For example, if you open a new pizza store in another city, you need to consider whether or not there will be enough business to support it. When considering expansion, consider population growth and decline in addition to economic growth and decline.
Expansion is not always the best option for your company. It depends entirely on your company and how well it meets the needs of its customers. However, before expanding, you should spend time examining whether or not it will help you achieve success in your business. Most importantly, remember to consider the risks associated with expansion. If you take a risk that doesn’t pay off, your business could suffer a loss.