As a business owner, you’re clearly a person who knows how to dream big and bring your goals to life. So if you’re experiencing success in your business venture, it’s only natural that you may eventually start to think about the possibility of expanding. But before you take the leap, think long and hard about what
expansion would mean for you, your team, and your profits. Here are a few things to keep in mind when making your decision:
1. WHAT IS THE CURRENT DEMAND LIKE?
If employees are putting in long hours, products are flying off the shelves, and/or you’re finding yourself having to turn away new business because you’re not capable of the extra workload, expanding is likely a smart idea. But don’t react too hastily. You’ll want to experience at least a few months of high demand to ensure it isn’t a temporary fluctuation. (And, of course, don’t make any expansion decisions based solely on your peak months or seasons.)
2. WHAT KIND OF COMPETITION WILL YOU FACE IN THE NEW MARKET OR REGION?
Plans to launch a new type of product or open a location in a new area require an immense amount of research on the competition. Your success will depend on you being able to offer a product or service that is better and/or cheaper than what your competitors are providing. (Keep in mind that it’s easy to favor your own business’s offerings, so try to think as objectively as possible when comparing your product or service against those of the competition.)
3. WILL RESULTING PROFITS MORE THAN MAKE-UP FOR THE ADDED EXPENSES?
If expanding means you can sell more products or provide more services, then, of course, it will lead to more profits – right? Unfortunately, that’s not always the case. Expanding can come with a lot of added expenses, from new infrastructure to new employees. For expanding to make financial sense, your ensuing profits must far exceed the costs needed to make your expansion possible.
4. ARE YOU (AND YOUR EMPLOYEES) PREPARED TO PUT IN THE WORK?
There’s no way around it – expanding a business takes a lot of hard work, commitment, passion, and motivation. If you don’t feel extremely driven to lead your business’s expansion, then it might be best to stick with the status quo. But if you do feel prepared for an expansion, remember that it isn’t just about you. You’ll want to make sure your entire team is onboard and excited about the direction you’re heading. The last thing you want is for critical team members to burn out and seek other employment right as you’re trying to enter a new market.