The consequences of expanding a business too soon can be serious. From loss of sales to an unmotivated workforce, rapid growth can harm your business in a number of ways that will eventually cause it to close. Expanding your business is no easy feat, and shouldn’t be entered into lightly. So how do you know if it is the right time? When you’re trying to decide, you should consider yourself as a leader.
Do you have enough experience to pull this off smoothly? Are you aware of the challenges you will have to face? Have you got an idea of how your perfect expansion would go?
If the answer to any of these questions is no then you need to really consider if now is the right time.
Can I Postpone?
If you don’t think you’re ready to expand yet, or that your business wouldn’t benefit from the change, there are some things you can do in order to slow down the process.
One of the most successful ways of postponing expansion – or seeing if you really need to, is to streamline all of your processes. Not only will this postpone an impending expansion, but it will also maximise the efficiency of your staff and of your businesses’ work ethic.
Streamlining can be anything from creating a more efficient way of stock checking to experimenting with a shorter working day to keep staff on their toes.
Employees may become stressed if there is too much work coming in and not enough people to complete it. Invest in some training for your employees so they know how to deal with these situations. They will learn to manage your company more effectively, meaning that when you do decide to make the decision to expand, they will be ready for the change.
It might be tempting to try and branch out when your business is doing well and think of what other markets you could be reaching. If you want to postpone expansion you should really only continue to target the audience you have, because anything else will bring new customers. Focus on retention marketing and keeping your current customers happy.
Postponing is never a long-term solution if you want a successful business that will last. These measures can help you for a short time, but unless you want to continue turning business away, you’ll need to think about growing before customers get bored.
When is it Cost-Effective?
These quick fixes can help you for a short period of time, but there will come a point when it is no longer cost-effective to not expand, and growing your business is the only way of keeping customers and staff happy.
A big business in a small businesses’ body means there aren’t enough staff to complete jobs efficiently and staff are having to work longer and harder to complete work to a high quality. It will also result in an increase in customer’s unhappiness and complaints. When these things begin to happen, you know it’s definitely time to expand.
All of these consequences will not cause an increase in demand, but a decrease, meaning unless you expand you won’t gain any new customers. Your marketing techniques will also be failing, so less people will hear about your company.
Signs It’s Time to Expand
Definite signs that you can’t put off business expansion any longer can vary in different industries, but the core strains are constant no matter what the business:
Employees are making mistakes
You don’t have enough resources to cover incoming work and keep up with production demands
You struggle to complete the amount of work you do have in a timely manner and to a high standard
There’s a more up to date way of performing your work that you aren’t taking advantage of (being online etc)
You’re frequently turning away clients who are turning to your competition
Is it time for your business to expand? Leave a comment below with your experiences!
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We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!