All of us have read promising stories about businesses that expand too fast and too soon, only to crumble at a later stage. Such stories can be scary for some business owners when they are considering business expansion. There is no right time to take the next step and it varies from one business to another. You do not want to wait until the opportunity has already passed you by. Here are a few signs your business is ready for expansion and you can take the next step now.
1. Your customers are asking for a solution
A major mistake you can make is to offer a solution without first identifying the problem. You may think that you have a big idea but this does not mean that it will work with your customers too. Listening to your customers will make a lot of difference. If your customers are always asking for the same solution and you do not have it, then take it as a sign to expand your business.
2. Customers do not negotiate the prices
If you have the pricing power, you are already doing better than hundreds of businesses out there. If companies rarely negotiate the price with you then it means you have a strong upside potential to increase business and growth. If you have managed to deliver profitably then you will enjoy a cost advantage over competitors and it is time to scale.
3. The business is generating profits
Take a look at the organization as a whole and consider the profits it is generating. Ask yourself if the present sales and infrastructure will continue to generate profits in the coming months, if the answer is yes, you are ready for top-line growth. If you are keen on expansion but not willing to block your money in real estate, you can consider a tent structure for the purpose of production or sales.
4. The team can handle things
It is important to have a solid team if you want to focus on the expansion of your business. This will ensure that the team runs things while you work on the expansion plans. It is also important to ensure that you have the money to fund the expansion plan and with the right team in place, you will be able to grow without any doubt. With the solid support of employees, you can ensure that you are doing the right thing.
5. The business is growing
When the business is good and you are comfortable seeing where it is going, then it is time to make the next move. When customers are on the waitlist and cash flow is good, it is a good reason to expand. It is essential for leaders to resist the temptation to remain loyal to the current pattern as it will not lead to higher growth. You should know when to change.
6. The demand is growing
Depending on the industry you operate in, the demand for your products or services is a clear sign of how the business is performing. If the demand is increasing consistently, it is a sign to expand the business. Always take a look at your business with a top to bottom approach and understand the mindset of the consumers before you make a decision to expand.
7. You enjoy financial stability
To earn money, you will need to spend money and the business should be structured in such a way that it generates revenue for you. Hence, you must check the resources you have and they should support you in every manner possible. You should design growth in such a way that you maintain a balanced position, even in a decline. The business should be scalable with a positive cash flow.
8. Expansion will help improve profitability
A lot of owners believe that expansion of the business has to happen but not a lot of owners take a second look to determine if it is a good choice. Ask yourself if the expansion will lead to high profitability and sustainability. If the answer is yes, then proceed with the expansion plan. If expansion means more work and the same profit, it may not be a wise choice. Do not grow for the sake of growth but look for higher profit and value.
9. You just know it’s time
As a business owner, you will just know when it is time to expand. The signs are right in front of you and you just need to respond to them. If your customers are telling you their requirements, all you have to do is listen and adjust to their needs.
Watch out for these 9 signs before you begin with the expansion plan. They will make a huge difference to your business and will take it to new heights.