Businesses evolve and transform over time in order to respond to changes in their environment and stay relevant and competitive in their respective fields.
Although some small businesses are happy staying small forever and have no other goals than to maintain a profitable activity and keep afloat, the majority of entrepreneurs have their sights set higher than that and strive to reach new milestones in their development. So, there comes a time in every company’s lifecycle when they have to decide whether to expand and ensure further growth or continue their operations as usual and risk getting left behind.
But even though business expansion is seen as a positive and even necessary endeavour as it can open the door to many exciting opportunities, it also brings along a great deal of challenges and obstacles that many companies can find difficult to navigate. And while larger businesses can afford to miss out on growth opportunities or scatter resources on futile expansion attempts, for smaller enterprises the consequences of a poorly planned expansion can be disastrous.
There are many ways for a business to expand, from creating new products and services or joining forces with another company to tapping into new markets in other geographic regions. No matter which path you decide to take in this respect, there are a few key considerations to keep in mind if you want to ensure a successful expansion for your company.
Don’t rush into it
Just because your company has the resources and capabilities to expand doesn’t necessarily mean it should, or at least not right away. Any potential change to a business should be thoroughly thought through before being put into practice. Timing is of the essence when it comes to business expansion. Do it too quickly and you might lose sight of the challenges and find yourself overwhelmed by the pressure and workload. Wait too long and others can get ahead of you.
You need to take the necessary time to understand exactly what a business expansion entails and prepare properly for what lies ahead. Don’t let the promise of new business opportunities detract you from acknowledging the risks. Do a thorough market research, weigh your options carefully and decide on the best course of action.
Establish clear goals
Sustainable business growth doesn’t happen randomly but requires clear and actionable goals. Since business expansion can take various forms, you have to decide which path you want your company to follow. Chasing after too many elusive goals at once or relying on your ability to improvise and figure things out along the way is not the best approach to further your business ambitions.
Once you know exactly what you want to achieve, you can devise a solid strategy in this respect and make good use of your time and resources. Speaking of time, it’s also necessary to establish a timeline for the expansion so the process doesn’t drag on for longer than expected. It’s also recommended to account for potential delays when setting up a schedule as you’ll inevitably encounter obstacles and hiccups along the way.
Do the math
When done right, business expansion results in increased revenue and profit. Hopefully, the changes you intend to implement are going to bring a good ROI, but until you get to see more money coming in, this development will likely put a strain on your finances. For example, you might have to invest in industrial tents to expand your storage capacity or purchase new equipment to improve operational efficiency.
Whatever your specific requirements might be, you need to calculate your budget and see if you have enough resources to fund your expansion, so you can maintain a consistent cash flow throughout the process. If the numbers don’t add up, you’ll probably have to explore different financing options to supplement your working capital.
Attract new talent
Expanding a business often implies hiring new talent to take on the extra workload you have on your hands or fill in the new positions in your company. This means you’ll have to set up an effective recruitment process so you can attract and vet professionals who possess the right skills and qualities.
Growing your team represents a major expense as you’ll have to invest in employee training and account for more salaries when calculating your budget. In some cases, outsourcing part of your operations or investing in technology might be the better option than hiring additional staff.
Get practical
Sometimes, entrepreneurs can get so wrapped up in analysing charts and figures and devising growth strategies that they neglect the practical aspects of the process and the more immediate business needs that an expansion entails.
Ultimately, expanding a business is about paving the path for growth: a larger customer base, increased sales, more team members and so on. With so many areas of the business scaling up, bigger, staying on top of logistics should become a priority. Anticipating warehousing needs and partnering up with companies like Tent Trading to increase storage capacity or working with companies that can arrange storage and shipping for your business are some of the measures you can take to make the process run smoother.
Onwards and upwards
Business expansion can be as exciting and profitable as it is challenging. Expanding for the sake of expanding is never a good idea, but if your company has reached a certain point in its lifecycle when it makes perfect sense to ascent to a new level, then you should focus all your efforts and energy on pushing forward and prepare for the next stage in your company’s journey.
