You’ve worked like crazy to establish your startup and suddenly it’s taking off. Does this surge of success mean it’s time to expand? Here are five ways to know for sure.
Strong financial standing.
Some entrepreneurs jump into expansion after one stellar year, only to fall flat when their cash flow decreases. However, when you consistently reach or exceed your financial goals year after year, there’s a good chance you have the stability to support business growth. Review your cash flow, sales history, and expenses to determine if enough money is available to invest in expansion.
Increased customer demand.
Let’s say you have customers who drive miles out of their way just to come to your location and lament they can’t find products nearly as good as yours anywhere in their towns. Or, people are repeatedly asking you to introduce a particular product or service. While you can’t cater to the whims of every customer, it can pay to act on multiple requests from your most loyal patrons. If you have enough repeat customers to support a second location or a new product line, start looking into the logistics of making their wishes a reality.
A level-headed staff member with a solid grasp of your vision for the business is invaluable. If you have multiple employees who fit that description, consider yourself blessed. Don’t let those talents go to waste; put them to work to make your second location a success! Think about who you can trust to handle daily operations without constant supervision and start assembling a stellar team to support them as you expand.
Need for diversity.
Sometimes expansion means penetrating new markets, which you can do simply by adding a few strategic options for your customers. It’s especially important to consider branching out if the majority of your income currently flows in from just one or two main sources.
Don’t forget to keep customers satisfied by offering multiple payment options. Investing in a quality credit card reader can increase your profits by at least $1,000 per month and the time you save on payment processing can be used to pursue other sales opportunities and marketing efforts.
If you’re turning customers away because you don’t have the resources to fill demand or there’s simply not enough room in your current establishment, you’re losing business. You can keep letting valuable customers leave in disappointment, but looking for a more accommodating space is likely a better choice. The investment you make in either expanding your existing location or purchasing a larger building will pay off when you’re able to stock more products and serve a wider customer base.
Making the decision to expand based on these factors is exciting. That said, it can also be a little scary. There’s no shame in seeking help from a business advisor. Be sure to consult with your accountant or financial planner to make sure there’s enough cash to fund your plans. If everything checks out, it might be time to go for it!