How to know the right time to expand your small business
In this 5-minute read:
- How to know when to expand your small business
- What is involved with expanding your business?
- What are some of the main ways I can grow my business?
Most business owners want to see continual growth for their businesses. But at what point do you make a conscious decision (and spend money) to start expanding your business?
A lot is involved with expanding and growing a small business, so it’s important to take the time to understand that process and what you will need for your business in order to make this happen.
Throughout this article, we’ll guide you through how to know when it is the right time to expand your small business and what is involved in the process.
How to know when to expand your small business
A few key indicators will help you identify whether or not it is the right time to expand your business. If you’re feeling the pressure of having too much work or seeing a steady workflow and want to increase it, then you may resonate well with these factors.
You have regular customers
Having regular customers is a great way to know whether or not you have a business that will benefit from expanding. Regular customers learn to depend on your offerings and guarantee continued revenue.
Repeat customers help you to know that your offerings are worth coming back for. If your current offerings keep new and old customers returning to your business, then you’ve probably got something that is worth expanding on.
Before expanding, it’s always good to know that you’ll likely continue to have people paying for your offerings and helping you to get new customers too. This makes your business more stable so that you feel comfortable making the decision to expand if you determine it’s time.
Your customers want you to expand
Do you have customers that travel from all around for your offerings? Have they expressed interest in having your offerings closer to where they live?
Listen to what your customers are saying and ask them if they’d like your business to be closer to them.
Are customers asking you to have longer hours or to offer more products? What are your current customers’ demands?
If meeting these desires and expanding your business will satisfy your customers and ensure even more sales, that’s a great reason to do so.
You have sufficient profits to dedicate toward growth
You can’t expand your business if it’s not in the cards financially. Take a look at your net income and determine if your profits are regularly increasing.
Look at your long-term trends and success. You might take your increase in profits and put it back into your business to help you expand and grow.
The industry is expanding
What are your current industry trends? Is the market growing and increasing in demand?
Pay attention to what is happening in your industry. If it is growing, then it will be much easier to expand your business because the growing demand will support it.
On the other side of that, if your industry is remaining stagnant or even slowly fading, it’s probably not a good idea to expand. You need to ensure that you will continue to see business and if the market demand is decreasing, you may lose money if you decide to expand.
However, even in a stagnant industry, you may be able to expand your offerings or step into related industries to increase sales and ensure future growth.
You have more business than you can handle
Do you find that you are consistently having to turn away business or that you and your employees are overwhelmed with the amount of work coming your way? Then it might be time to hire/build/franchise/grow.
Consider growing to keep up with the demand of your current offerings.
What is involved when expanding your business?
Expanding your small business is no small feat. There’s a lot to think about along the way from the methodology of how you will expand to how you will market your growth and sustain it.
Think about exactly how you plan to expand your business
As you are determining whether or not expanding is right for your business, you need to consider the different ways that you can expand your business.
- Will you offer new products or services?
- Will you open up new locations?
- Will you start a delivery and/or shipping option?
- Will you offer products in an online store?
- Will you annex space next door?
- Will you simply hire more help?
- Will you acquire and/or merge with another business?
- Will you try franchising your business?
Think about the reasons that you want to expand and which method of expansion will benefit your business the most.
Hiring new staff
Expanding your business will likely result in hiring new employees. Whether you are opening a second location, expanding your offerings, extending your hours, or franchising, you’ll need to start thinking about the hiring process and maybe even promoting current employees to management or training positions.
You’re going to need the extra help to ensure good productivity and customer satisfaction, so make sure you hire the right people for the job and give your current employees the chance to grow by having them train and onboard your new employees.
New sales and marketing efforts
Expanding your small business will require some additional sales and marketing efforts, especially if you don’t already have overflowing demand for your offerings.
Consider how you will be expanding your business—new offerings, new location, merging—and plan a marketing campaign around that growth.
Check out this article: Guide to starting your first marketing campaign
As you make the decision to expand your business, another aspect of marketing that you will want to look at is your online reputation. Do you have good online reviews? Is the conversation around your business positive?
Even if you have an increasing demand for your offerings, if your online reputation is poor, then it may be difficult to acquire new customers when you expand.
If you need help improving your online reputation, consider trying a reputation management software. Womply’s solution can help you automate the process of managing new customer reviews and responding to them, saving you up to 10 hours of work each week.
If you’re interested in learning more, fill out the form below for a free demo.
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