Entrepreneurship continues to grow rampantly around the world and particularly in the United States of America. However, the business life cycle tells us that every business eventually reaches a crossroads. The time comes where small businesses must decide whether and when to take the big leap and do the next right thing. If you are a busy mom wondering how you can pull off your big career goals, while not letting your kids down, here are some signs that may be telling you it is time to consider a step forward.
Signs It Is Time To Expand
Your resource capacity is stretched thin. This may apply to your machinery and production capacity or even to the human resources in your small business. Perhaps labor is being overworked and demand is growing. Fears are rising about meeting the order quantities and as your customer base grows, so should your business.
Speaking of demand, it may be time to expand if your market or industry is growing. If your market is growing, potential for higher demand is there. For your company, this means there are increased chances for a successful expansion and the demand in the market to handle your expansion. With the growth you may see the demand for related products and an expanded range offering. Targeting specific buyers helps to customize your product but also helps your bottom line.
Another great indicator is your cash flow. This one is very important because essentially your cash flow will be heavily involved in the financing of your business expansion. Even if you choose to secure external finance for your expansion plans, you want a steady positive cash flow to be assured you can afford the repayments and cost of finance. A steady stream also indicates your business is relatively stable; one year of great profits does not necessarily mean it is a good idea to expand. Be sure to look at your income over at least three years.
Now that you have an idea of the indicators that it is time to expand your business, how can you actually expand? There are many avenues and they do not all have to be drastic and overwhelming. Here are three ways and how to finance it.
Expand Your Capacity
One of the more common ways to step up your business is to increase your resources. This can mean several things including securing larger business premises, expanding your workforce, or upgrading your machinery; perhaps considering a new performance management system to help simplify any number of evaluations into one easy annual workflow, for example. This can be tricky however and requires due diligence and research. Be sure to establish that the conditions that are conducive to your expanded capacity are present.
These options for growth can be substantial and require financing. If you are looking to secure a better property or to move your small business from your home into its first office, you will be looking at substantial expenditure. Your options for purchase can be either leasing or choosing to purchase the building. As with your home, mortgages or business loans may be needed to complete your purchase. You’ll need to calculate how much you can borrow as a commercial mortgage when planning your expansion, which will give you an idea of the monthly payments your business will need to cover each month. This is where your income stream comes in useful.
Don’t Go It Alone
Many small businesses have the misconception that they need to build their business alone. This is not true. Exploring agreements and partnerships with other businesses both in your industry and in complementary industries can be beneficial for your future in many ways. A great benefit of this option of growth is the reduced scale of financing needed. Having a partner business splits the costs attached to the expansion. Having partnerships with more visible businesses will not only get your product out there but also boosts your own visibility and brand at the same time.
Go Digital
Keeping up with the digital and technological shift is quickly becoming indispensable to any business wanting increased visibility. Having a digital presence comes with many benefits and minimal costs compared to other options. It’s also crucial to leverage strategies like local search engine optimization to enhance your visibility further. Implementing local SEO practices ensures your business is found by potential customers in your area, making it an essential step for small businesses aiming to expand their reach online. This is a great way to drive demand for your products and boost your brand name.
By employing an interactive website and social media tools, as well as relying on the services of a professional marketing agency, you can get your customer base growing in no time. It does not require a dedicated office space either, with many startups and home businesses utilizing online selling platforms such as Etsy to get their business started or to go national. Financing for digital expansions tends to be less and can be supported by retained profits. If you are seeking external finance, a marketing and business expansion plan is important for your interview.
It can be easy to automatically think of upgrading property/floor space or even production capacity when you think of growing your business. However, it can also mean simply growing your brand! Focusing on the marketing of your brand is still stepping up your business, and in the long run ensuring your success.
