Thinking about expanding? Congrats. But remember, it’s important to plan for growth as carefully as you did when launching your company — early profitability isn’t a green light for reckless expansion. Here’s how to determine if you’re ready for the next step.
You have more business than you can handle.
Perhaps the most obvious indicator that growth is warranted is that you can’t meet demand. But make sure to track the numbers, because having a crazy-good month isn’t the same as sustained demand, especially if it coincides with the holidays or a special event. If you have a POS system with analytics baked in, it should be easy to track historic sales by month. You need to be confident that the appetite for your brand is real, and not just a fluke before sales level out again.
You have a solid team of employees.
When you look five years into the future, can you see yourself working with the same core staff? Are they invested in getting the business to the next level? If the answer is no, think about the holes you need to fill and plan for making some strategic hires And you not only need to have the right team, but you need to ensure that everyone is on the same page in terms of where the company is going. Check out our tips for hiring great people make sure you’re putting the right team in place.
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You’re running out of space.
Sometimes you know that you need to expand because you literally have no more room. If you’ve been hiring to keep up with demand but your staff is cramped and cranky, it’s time to secure a space with more square footage.
You have a plan for growth.
It’s important to have both short- and long-term goals, but you also need to map out a strategy for getting there. Do you have the right partners in place? Have you secured the necessary facilities? Is there a plan for training new employees and launching your business in a new location? Make sure you have a roadmap for expansion.
You’re meeting goals.
It’s one thing to have a roadmap, but you also need to be reaching the milestones that you have set. If you are, and ahead of schedule, then maybe you can speed up your plans. But if you’re consistently falling short, then take a step back and reassess. It doesn’t mean you have to scrap your goals, but you might have to change your timeline and path.
You have enough cash.
Quite simply, do you have the money? Even if you’re doing great on paper, you need to be getting paid on time and have positive cash flow to fund your expansion plans.
Your customers are seeking you out.
If customers are requesting your products in stores, or if they’re telling you how much they’d love to have your business in a certain location, that’s an indication that you have the word-of-mouth support and the built-in clientele for ramping up production or opening a new shop.
Your industry is growing.
Take a look at the landscape for your industry: Is the market saturated? Or are you just scratching the surface? If you have little competition and a large, untapped customer base, you have better odds for successful growth.
Growing your business is exciting. Hopefully these tips will help you be smart and strategic about it.