Business growth brings with it its own set of challenges, which can be mitigated with proper planning beforehand. There are several factors that a sharp business owner will consider before finalizing his decision and ensure that every variable stays under control, so that he wouldn’t have to compromise on anything later.
Let’s have a look at a few of these factors.
1. What’s Your Strategy?
Without a strategy, your business will function like a ship without radar. No one can move ahead if they are directionless. You need to chart out a proper path at the time of starting your business – a vision and a mission, a strategy, for you to navigate towards a certain goal as you lead your team. A robust strategy will help your company weather the toughest of storms.
What did you have in mind when starting your company? Did you create it for short-term benefits, to be sold off 5 years later? Did you want to keep investing and let it grow for another 50 years? Whatever your strategy, you will need to keep coming up with new, high-quality and innovative products to diversify and keep investing in the key areas accordingly.
2. What Locations Are You Considering?
Apart from striking at the right time, striking at the right place can also have positive implications on your business’s success. When making a decision about which location to grow in, do factor in the following –
- Have you considered the locations where you stand a good chance to succeed after expansion?
- Do you plan to expand within your community/country or plan to go global?
- Is there enough demand for your product/service in the region you plan to expand in?
- You will obviously need a space where you can operate from. Considering that, should you look to lease or buy new property?
- Which available offers from the various commercial real estate companies in the location you’re considering are most suitable to you?
- Will you be able to manage your second office from your current location?
3. Is the Market Conducive?
Business expansion is a long-term commitment for most businessmen. All financial and operational decisions you make will have ramifications on the performance and the course of your business. Expanding your customer base without compromising your existing one should be one of your top priorities during the growth phase.
You will do well in selecting markets that offer the type of business environment that you’re used to, where you can expect to face a level of competition that you’re familiar with.
Additionally, it makes sense that you familiarize yourself with the business ethics and culture of the new location as they can vary from country to country. Finding a market with a culture that you can easily blend into will make the process of expansion faster and easier for you.
4. Can You Finance It?
Ideally, you should expand if you can answer the following in the affirmative –
- Do you stand to gain financial benefits from the expansion?
- Do you have the kind of working capital that will support the additional investment?
- Will you be able to fund new facilities, technology, human resources and additional inventory?
Expanding your business operations may imply that you will have to take out loans from a bank. You, therefore, need to ensure that your new venture allows you to generate enough profits to repay the loans. Being debt-ridden can spell doom for your business. Make sure you expand only when you’re confident of earning financial benefits from it.
5. Do You Have the Manpower?
It is impossible to run a business without competent and experienced staff. Whether expanding will enable you to hire the kind of talent you’re looking for, is something that you will have to be mindful of.
If you’re looking to expand to another location, you will need to verify the availability of educated and skilled employees who can be incorporated into your team.
6. Do You Have the Technology?
Having your systems and processes in place at your current office before you start a second venture will be crucial to the smooth functioning of the latter. To ensure a problem-free expansion, get the necessary online/offline technological resources sorted out. This may include installing software related to functions like accounting, invoicing, marketing, administration, and so on.
When it comes to machinery and equipment, you will need to not only install the best, but also maintain them in the best way possible.
7. Do You Have Customer Support?
Natural and man-made calamities, the ongoing recession, and other such events in different parts of the world can have a significant impact on the demand for your product/service. In such scenarios, it would be nice to have a financial cushion (cash reserves), which can support the expansion even when the customer demand is low. Furthermore, you will do well in making sure that your product/service fits into their limited range of consumption during such times.
Whether you want to expand your business within the boundaries of your country or go global, there are certain basic concerns and considerations that remain the same. Problems and barriers will always be around but none will be insurmountable if you have a strong business plan and strategy, and the people to support it in place. Make sure you do not lose sight of your already profitable business while trying to hit the jackpot with the new venture.
By: Suraj Kumar – Suraj is the Founder & CEO of CloudBooks – an Invoicing & Billing Software for small businesses and freelancers. He likes to solve problems related to small business and SaaS. Feel free to reach him out if you need any help.