Expanding your business is almost always on an entrepreneur’s agenda. Whether it’s increasing your revenue from $1 million to $10 million or beyond, your decisions regarding how to expand are crucial. Ascertaining the right time to grow is one of the key qualities of successful entrepreneurs.
Business expansion comes with some inherent risks and your ability to identify the ideal conditions for growth will determine your continued success. Let’s look at some key indicators that tell you whether it’s the right time to grow your business.
Business experts advise striking a balance between profitability and growth. One of the most important signals you should look out for before expanding your business is your profitability. So even if you have been in business for many years but your profits have been stagnant or going down recently, then its probably not a good time to grow your business. Conversely, a healthy profit & loss statement and stable balance sheet should be taken as a “go ahead” for business expansion.
Growing economy and industry
A strengthening industry and economy will certainly provide a supportive environment for your business growth. Your decision to expand your business will have a much higher chance of being the right decision if your local economy and niche/industry is healthy. As long as your research doesn’t reveal market saturation, you can use this indicator as a basis for your business growth.
Do you have to often turn down business because you’re working at full capacity? Or do you consistently have a long line of customers waiting to be served by your business? If yes, then it’s probably a great time to grow your business. You need to expand to cater to the bigger market and higher demand. It will result in incremental revenue and sustainable growth for your business.
Business expansion invariably requires substantial upfront costs. You need to explore your funding options before you can make the case for business growth. If you have access to appropriate funding, the time is right to expand your business. In particular, look at the projected ROI i.e. how much incremental profit will the expansion generate. It will help you decide whether the expansion is worth the investment.
The idea of growing a business is certainly an exciting notion for business owners. If you’re considering expanding your business, keep the above points in mind before moving forward. They’ll help you determine whether it’s really the right time to grow.
Fatima Mansoor is a writer at Aepiphanni, a small business operations and strategy consultancy that exists to help small business owners CREATE | DESIGN | BUILD extraordinary businesses. She is a freelance blogger, specializing in business & entrepreneurship, digital marketing, and health & fitness. Her focus is on creating compelling web content for small and medium businesses form diverse industries. She mostly writes for entrepreneurs and marketing agencies across the US, Australia and UK.
We would love to hear from you. Please share your thoughts and comments below. If you are seeking advice on how to grow your business, streamline systems and processes, implement software or overcoming challenges to growth, please contact us, directly or submit a request for a complimentary Coffee & a Consult to learn how we can help you CREATE | DESIGN | BUILD an extraordinary company.