Owning and operating a business is one thing, making it successful, expanding your business and having the ability to last the distance is something else indeed. When a business is doing well, it will have a natural tendency to grow and start going through the business life cycle, that is to say: Start-up -> growth -> scale-up -> maturity -> exit.
The number of growth, scale, and maturing stages will often repeat and change, depending on how the business develops and is handled, and most owners and executives want to keep the exit period away for as long as possible – because once it hits that stage, you either need to start back at start-up to save it, or abandon it entirely.
The decision of consider when expanding your business involves more than spur of the moment decisions, and there are actually pros and cons to not only the decision, but the timing, and the way in which it happens as well.
So, before you think about making the next step, here are some key points to consider when expanding your business:
- Doing your due diligence
Before rushing to expand, you need to take a clear look at your industry – past, present, and future. Examine your competitors, who is doing well and why? Who failed – and why? What did it cost for them to grow, and can you afford to maintain your finances and meet these costs during your own expansion?
- Evaluating your own numbers
If you’re planning on expanding due to great sales, have you looked at the conditions under which they happened? Was there a fad or trend motivating people to spend? Are the sales figures sustainable? Do you have the cashflow and investment to increase your operations on every level? If the market were to turn volatile, would you be able to keep trading?
- Enshrining company culture and values
As you get bigger, you’re going to have more people and places to deal with – both as employees and customers. Your vision, values, and company culture need to be robust and define your goals for growth – and they need to be effectively translated across to all new employees and workplaces as you reach out.
So you need to consider, what is our training process? Do we have a strategy in mind to implement what we need? Can we effectively communicate this to all new hires in an appropriate amount of time?
- Keeping up the quality
This is vitally important – whether you’re producing a product or service, you need to maintain or improve the quality, because if you can’t, then your expansion will actually damage your reputation, sales, and bottom-line.
- Hiring the right people at the right time
Business expansion typically requires team expansion as well, but if you don’t do it right – you can have a massively negative impact on your existing staff, potential future staff, and the reputation of your business.
If you hire and train first, you’re more likely to have an easier time expanding than if you over load your existing team whilst expanding, and then bring on people that need training at that point.
- Knowing your limits
Expanding takes time, effort, budget, and resources – and once you’ve started, it’s difficult to return if you don’t get it right. You need to know what drives you, what room there is for the growth and expansion in the market, and then look at innovation, employee satisfaction, customer diversification, revenue, and all the other facts that are going to impact operations and sales – if you don’t know where you limits are, then you’re not going to be able to identify how far you can go before you damage your company.
- Changing or doing more of the same
Is your business process one that can naturally scale? If more people do the same thing, will it come out the same way? Or, do you need to re-evaluate what you’re doing, and consider new ways of working in order to be able to deliver the larger quantities?
There are some areas, such as expression of vision and values, where you need to be consistent and stay the same, but other areas may provide opportunities for improvements (such as updated marketing or sales).
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There’s a to consider when expanding your business, but at the end of the day, it simply boils down to two questions that should determine your direction: Is it viable? Will it survive and thrive?