When to Consider Business Expansion: Signs and Solutions

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SEMINAR 21: WHEN SHOULD I THINK ABOUT EXPANSION? Think back to your business project in the early days, when it was just you and a piece of paper scribbling and thriving ideas to create and build your dream job. Are you ready for the next step? When your business started, it likely became apparent that it was time to expand: you needed more office space, extra help, a decent computer, and other resources and innovations to grow the size of your business and increase the scale of your operations. It may well be a question of survival in a competitive market! The expansion made sense in retrospect, but it s not always so obvious in the moment - especially when you need to invest capital into development. Take a look at these few signs and decide if it s time for you to expand.

A Lack of Skill Means Help is Needed. An excellent time to grow your business is when you no longer have the skills to do the job. Don t see this as a personal shortcoming - It is part of a business s growth cycle. As a skilled mechanic, you may have the expertise to fix any vehicle without a problem. Still, you might not know how to perform accurate accounting, payroll, or manage social media. Sometimes, the right employee or manager makes the difference between developing new skills and getting by. Other times, it s best to step down from your weak areas, hire the right help, and focus and invest in what you do best.

Customers and Demand Sales are stagnating. Despite repeat business, you notice you have only a few new customers. Customers repeatedly ask for the same solution, products, or services that you don t have. This is a sign that it might be time to expand or take a new direction in your business. Survey, and listen to your customers. Feedback can generate significant growth opportunities and help you find innovative ways to achieve customer satisfaction and move more products to increase volume and revenue.

Space - Equipment - Storage Whether working from home, in an office, a store, or a manufacturing facility, you need enough room to operate comfortably. You may need to expand if you are tripping over boxes, furniture, or your employees are squeezed in crowded spaces with no elbow room. These close quarters or the incapacity to bring in new equipment for better efficiency could mean purchasing a new space, building a second location, or renovating your existing site. Be rational about leasing a larger space or moving to another location. Look closely at a different scenario and the cost considerations (taxes, utilities, transport, access). Ask yourself if the growth you re experiencing is consistent or simply the result of seasonal trends . Finally, will the expansion lead to improved customer experience or employee work environment?

Too Much Business to Handle Yourself Too much business isn t something most start-ups worry about; it can become a big issue for rapidly growing companies. Suppose you re working long hours or turning away customers due to incapacity. In that case, it may be a good time to expand your business by hiring help, increasing production capacity with new equipment, or getting a bigger place of business. Too much business is the perfect excuse to expand your company. Just take a closer look at your sales records and ensure it s not a seasonal fluctuation that will leave you overstaffed once it s passed.

Opportunities When a great location or great space in an event is available in a busy part of town, a chance for an acquisition or partnership/investments presents itself, or when there s a shocking sale on necessary equipment or goods, you may need to grow your business faster than you re Remember: comfortable with. Rarely do great opportunities go according to plan. Be flexible and willing to pivot when an opportunity comes knocking. More often than not, it will seem risky when it appears; you will need to carefully analyze the situation and see if expansion is feasible and suitable for your core business and competencies, visions, goals, and values. If it feels right, seize it before it s gone.

You Find a Golden Product -Market Fit If you find the perfect product-market fit in a new market for your product or service and you can t afford to wait and see how things play out. Market segmentation analysis: will your product sell in this new market? Product gap analysis: Is a similar product already selling well in this new market? SWOT analysis (strength/weaknesses/opportunity/threats) to determine, for example, if your product is priced higher than local merchandise, will I be able to be competitive? Market opportunity/sizing: how significant is the new market, and how long will it take to seal targeted sales?

Money in the Bank As mentioned in previous seminars on budgeting, keeping a safety cushion on hand in case of an emergency is essential, but too much money sitting in the bank does no good for your business. You need to put that money to work! Use your extra capital to grow the business: make timely repairs, replace outdated equipment, invest in real estate, hire talent, and improve marketing campaigns. Think of ways to grow your business and get that cash working for you. Be careful not to get caught up in the excitement. If you push your business too soon, you might not have what it takes to survive. Watch for these signs. They can be a great indicator, and when the day comes, be confident in your decision to start the next phase of your entrepreneurial journey.

Keep Your Hands on the Wheels. For your business to achieve growth and expansion, it is critical that you, as the manager and owner, take control and identify opportunities for development that are consistent with the company s vision. Furthermore, take care to realign your business model to adapt to the changes that growth and expansion opportunities may bring.

SELF EVALUATION Please select the correct answer by clicking on the box. What is a false sign that may make the business expansion risky? A. A. When you need to bring in additional expertise. B. When you are mistaking growth with seasonal trends. B. C. When you are getting overloaded with work. C. D. When your space starts to feel small for the size of your business. D.

SELF EVALUATION Should you take advantage of all business opportunities that are presented to you? A. - Yes, business opportunities are hard to come by and should be seized in order to gain the most from them. A. B. - No, business opportunities and expansions will lead to an overload of work for you. B. - No, you need to carefully assess the situation and see if expansion is feasible and suitable for your business and will not affect and ruin your core business and competitive advantages. - No, opportunities are risky and expansion can lead to a loss of funds, which should always be avoided. C. C. D. D.

The next Module will be: How to Retain Key Employees

GLOSSARY Click on the word to go back to that slide. Core business: Business core competencies are your company's unique abilities, products, and services that give it a competitive advantage in your industry and market. Stagnating: To stagnate means to stop growing or developing, or not show any signs of activity. Facility : A space provided for a particular purpose, like a warehouse for storage or office space for a sales team. Pivot : In a business context, to pivot means to suddenly change direction in the way affairs were being run it is a core component to flexibility and helpful when faced with the difficult task of expansion.

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