Businesses expand in their own way every day. Maybe that’s through the acquisition of a new customer or just the steady accumulation of profit overtime. But there comes a time in any business life where the opportunity for real, tangible business expansion presents itself. In this article we will be exploring the signs that a business needs to expand.
Top 7 Signs for a Business Expansion
There are a lot of various signs you can watch out for but here are the seven strongest ones.
1. You are way past the break-even point
All businesses have the sole objective of making money. It’s probably why you started this venture besides the service you provide. The first milestone in a successful business is making it past the breakeven point, whereby you are receiving disposable income which can be invested into the business. When it gets to the point when you are getting so much money that you don’t know what to do with it, then it is time to consider expanding.
2. You have loyal clientele
Repeat and loyal customers is always a good sign that you are doing something right. With this acknowledgement of your services, you can look to the future and foresee a greater customer base. Loyal customers can also support you through the expansion process. With expansion comes uncertainty. Uncertainty can be bad for business, even when it is good uncertainty. That’s why it is crucial that before you consider business expansion, you have a loyal base of clients behind you that will stay with you and support you through your expansion.
3. You have the team
Whether you are a small group or you oversee many employees, a high performing loyal team is of prime importance to overseeing and helping with expansion. Naturally, with expansion come new and unique challenges, and to successfully move past them, a high performing team is required to deal with them.
4. The business is operating beyond its means
A more obvious sign that your business needs to expand is that it doesn’t have the capacity to meet its current means. Perhaps that’s space for manufacturers or workers, alternatively it can be the time or manpower to meet the demands of your customers. If it gets to the point where you are actually turning down business as you are over occupied, then you know you need to expand.
5. Your industry is in a good place
Whatever your operations are, a good market knowledge is crucial to foreseeing success in expansion. This is more complex than some of the other methods, and may require careful analysis and insight of the market. If all the evidence is pointing towards a successful future for the industry, it might be the best time to expand and reap this upturn. On the other hand, if a downturn is on the way, try to save the money you have.
6. The systems are in place
Business expansion does not occur overnight. It can take months or years of acquiring new assets, identifying and training employees, all while at the same time managing your workload. If you are looking to expand, you must ensure you are completely prepared for this expansion. For example, standardised procedures need to be in place to train up new employees. Additionally, your business processes need documenting and standardisation in order to replicate business operations at another site.
7. There is a unique need to exploit
Business expansion is not always a case of merely supersizing what you are already doing. Another method is diversifying the business and opening up to new markets. An example is a manufacturing business. Perhaps your operation requires the supply and delivery of expensive raw materials to run. One way of expanding could be to set up operations procuring these raw materials. This can make your primary business gain more profit and opens another revenue stream at the same time.