The key to successful expansion is to first consider if your business is truly ready.
Consider the following:
Cash flow crunch. The ebb and flow of cash in, cash out gets more complicated as you grow. It doesn’t take much growth before your monthly expenses exceed your operating credit, and suddenly one bad sales month takes on a whole new meaning.
A success spending spree. It’s tempting to see the orders come in as a sign that it’s time to spend. It’s true that growth requires adding team members and infrastructure, but don’t take it as a license to go on a spend-a-thon.
Human resource risks. Change makes people worry, especially when that change puts the business at risk. It doesn’t take many months of barely meeting payroll before even your right-hand man is dusting off his resume.
Decision-making changes. Growth means stepping back from the day-to-day operations into a leadership role (and that isn’t a bad thing); however, it does disconnect management from the nitty-gritty details that may affect business decision-making.
Leadership shortfalls. Any leadership faults become painfully obvious when a company starts to grow. Just as awkward processes only matter when the company needs to scale up, the same holds true for leadership skills.
Now ask yourself the following questions:
Are you accomplishing your goals?
Review the strategy you set at the onset of your business.. If you’ve gone off the rails, it’s probably a sign there is still work to do before you should expand.
You should have detailed financial projections, which you can compare against your business’s actually financial performance. If you’re surpassing your original goals, it’s a good sign that you might be ready to expand.
Do you have the right people to help you grow?
No matter how hard you work, you can’t be in two places at once. You’re likely going to spend the majority of your time focused on the expansion as it gets going, so you should make sure you have a solid team overseeing your the business you have already built..
Working with other supportive partners can also be very beneficial as you consider expansion.
For example, an experienced bookkeeper can keep your records updated and provide financial reports that detail the performance of during the expansion.