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When you set out on a mission to be an entrepreneur, you may dream of the day when expanding your business becomes a real possibility. It’s so tough to make a startup successful, and it can be easy to get carried away, especially if your first few months have been plain sailing. Growth is a target for most businesses, but like most things in life, timing is everything. If you’re thinking about expanding, here are some tips to help you decide whether now is the right time.
Are you turning over a profit?
Being successful in business isn’t just about getting rave reviews and generating sales. Increasing your takings is an extremely positive sign, but you’re not going to make a profit overnight. It can take a long time to make a business profitable even if your sales are going through the roof. Take a good look at the books and pay close attention to the figures. It’s unwise to consider expansion if you’re still in the red, and playing a waiting game may be a better option. You may have debts to pay off from setting the company up, or you may be spending too much to produce the margin you want. If you are driving sales, but you’re not taking home as much money as you’d like to be, look at areas where you may be overspending and try and make the business more cost-effective and efficient.
Can you afford it?
Running a business requires money. You can’t establish a company without investment, and you’ll need a steady income to keep you afloat. If you plan to take the next step, it’s highly likely that you’ll need a cash injection. Perhaps you want to hire more people, open new venues or premises or increase your product range. All of this requires cash. Before you start making plans, work out how you could finance your growth strategy. You could look at borrowing options like those offered by firms like Swift Financial, you could delve into your own savings pot if this is a viable possibility or you could look for external investment in exchange for a share of the business. If you are looking to get investors on board, it’s imperative to have watertight plans in place. An investor will want to know every single detail before they part with any cash, so be ready to answer some potentially tricky questions.
Is there a demand?
If you’re offering a product or service, there has to be a demand in order to make money. If you’ve got a loyal client base and you’re getting new orders or inquiries all the time, this is a good sign that growing the business could be a step in the right direction. Repeat customers indicate that you’re providing a good service and there’s also a good chance that those clients will recommend you to others.
If you have a business, your goal is probably to make it bigger and better. The key is knowing when to take the next step. Look at your finances, work out if you can afford to expand and make sure there’s a growing demand for the products or services you provide.