Getting through the first few months in the life of your business can as invigorating as it is challenging. But sustaining that effort over the long term can throw up a few more obstacles. If your business is thriving, then the decision to expand might seem an obvious one. But if you expand in the wrong way, then you might be setting yourself up for problems further down the line.
What are the questions that you need to be asking of your business before taking the leap into expansion?
As your form your plans for expansion, you’ll want to be posing several distinct questions to yourself. The answers to these questions will help to shape your strategy for expansion.
Will the expansion have costs associated with it?
If you fail to account for the costs you’re going to be assuming, then the expansion might end up backfiring. For example, if you’re going to be upscaling a manufacturing facility, then you’ll need to think about the extra space, equipment and personnel that you’ll need. Fail to account for any of these, and you risk creating a problem for yourself.
In most cases, the costs of expansion are weighted toward the early stages, when you’ve made large investments in capital that haven’t yet had a chance to pay for themselves. Make sure that you have enough liquidity to survive during this period of financial pressure.
In some cases, you can spend a little more in order to cut your costs. The investment in the right payroll software, for example, might make a significant difference.
Underestimating your costs can mean an expansion that should be highly profitable is less so – or even fails to be. Your accountant will be able to help you understand likely costs and impact on the bottom line.
Do you have a timeline for the expansion?
If your timeline for expansion is open-ended, then you more-or-less guarantee that it will drag on for a long time, and cost a lot more than if you’d had specific goals and deadlines in mind. Set out a timeline, and use it as a basis for judging the success or failure of your expansion later on.
What additional expertise might you need?
An expansion is something that many businesses will have little experience in. Bringing in a specialist consulting firm will help you to avoid potential stumbling blocks, and inform your strategy when it comes to future expansions. While these experts might charge a fee for their services, the cost will often be offset by the advantages.
Have you done your research?
You’ll want a strong idea of what your expansion is intended to achieve. Set this down in a document that you can refer to later. This will help to guard against mission creep, and keep you focussed on what really matters.
What’s more, you’ll need to inform your staff about what’s coming. If your workforce aren’t prepared, then you might face issues with morale and staff retention later on.
Good Luck!
With everything considered, the right help in place, a plan on paper and the will to make it work, we wish you every success in your endeavour!
