You’re probably reading this because you’re thinking about expanding your business in one facet or another. Expansion can mean a few different things to a business. It may be that you’re looking to open a new location. Perhaps new equipment is needed to grow. Or, you may need to add new staff to keep up with the demands of the services or products you offer. Whatever capacity of expansion you’re pondering, there are some considerations before making that decision.
*What’s commanding the expansion? Are you having a difficult time keeping up with customer demands? Are you finding you don’t have enough employees to keep up with the workload? These are definite signs that expansion is necessary. Are you basing this idea on wanting a picture of what you want your future company to look like? If the latter is the case, you may want to cross-examine yourself. Big vision is great! However, you don’t want to get in too deep. A financial and time consuming undertaking can stress you and your business to a point of no return.
*Keeping your customers in mind. What’s a business without customers? Will this expansion bring you new clients? Furthermore, while you’re making this change, will the environment be customer-friendly? Meaning, how inconvenient is it going to be for customers to come into your location? The last thing you want is to lose customers during this process that’s supposed to build the business.
*Undergoing an expansion can put a lot of demands on you. There’s money you’ll have to spend in addition to time you’ll have to put in. Be realistic about the sacrifices you’re going to have to make. Have a solid plan in place. Include your family in the plan and be sure they’re on board with what’s about to happen.
*In your planning process, be sure to have reinforcements in place. Things you normally handle may require someone else that can handle tasks for you while you’re busy with the expansion? This may spill into your personal life as well. If you’re the one that primarily does the food shopping, for instance, consider using a delivery service instead. It’s better to plan these things out than to add stress by not having foresight.
*If you’re opening a new location, do your homework! A building is only as good as the area it’s in. Will your new location be convenient for people to get to? Does the demographic of the area match the market you’re looking to attract?
*You’ve probably already researched this, but just in case… are other companies faring well in your industry? Also, can you foresee a growing demand for what you’re selling/offering? It’s difficult to gauge the future of a company, for certain. Some more so than others, especially if it’s a new market. If you have a company that sells trendy products or it’s a trendy hot-spot, you may want to wait. Give the business time to develop to make sure it has staying power.
*Can you afford it? This is tricky. You may not have the funds to start the project initially and will likely take a loan to fund the expansion. That’s all well and good… as long as you’ve estimated properly. If this is going to make you more money, that will support the expense, pay for itself and then some.
In conclusion, do you have a plan to cover the expense of this addition? You’ll want to weigh your options as to whether you’ll be using your own money or financing it. If financing is the route you’re taking, where will you be obtaining the capital from?