Knowing when to expand a business is an important decision. Grow too quickly and you can take on costs your business may not be able to support. More importantly, grow too slowly and you may miss out on valuable opportunities. Make sure your plans fit with market conditions and with your personal goals.
Here are five key factors to think about when you’re deciding to expand:
1. The marketplace
Is your marketplace big and healthy enough to handle and maintain your growth, or will you need to find new markets? Will you be offering a new or improved product? How will you attract new customers?
2. Your bottom line
What additional costs will you incur? Will you need more staff, space, equipment, or financing? Will the additional revenue you earn justify the increased costs?
3. Your existing customers
How will expansion impact your current customers? Will they continue to get the same quality of service?
4. Your suppliers
Can your suppliers meet your new demands? If not, do you know who can?
5. Your lifestyle
Finally, think about what impact a business expansion will have on you personally. How much more time will be required? How will your personal life be affected?
When you do make the decision to expand, revisit your business plan and revise the original with the new ideas. Building on the information and experience you have, see how the new, larger business will work on paper.
Do you know the difference between a vision statement and a mission statement? Both are key parts to running any business.