Business Growth

Often, when I post information about business coaching, my focus is on those businesses that are struggling and need a business consultant to help get them back on track.

Today I want to switch my focus to those that are successfully running a business, making a profit, have healthy relationships with their employees, customers and vendors, and are considering expansion.

One doesn't just roll out of bed one morning with full plans for expansion and run with it. Expansion, if done incorrectly, can actually be harmful to your business. 

Here are some things to consider to ensure you get the results you are looking for. 

Market Intelligence

Will the market support the expansion? If your competitors are successfully expanding, it may be a good sign that your expansion will also succeed. Consider if there is a population shift that may allow you to expand into a newly populated area.

Economies of Scale

Will expansion allow you to purchase product and supplies in bulk, resulting in lower cost per unit? Consider if a higher sales volume will allow you to reduce your prices to better compete.

Cash Flow

Do you have proven numbers that your current cash flow will support the expansion, and that the expansion will positively affect your profits quickly? Purchasing or leasing a new building or renovating your current facilities can be costly. Additional equipment, supplies and product also add to your immediate and ongoing expenses. Before even considering a bank loan, plan ahead for how you will repay it. Don't expand yourself to death.

Timing

Consider how world events may impact demand for your product or service. Is your product recession proof? Will people still need your services when terrorists strike around the world? Does your business have the financial fortitude to withstand a time when demand drops off, waiting for a recovery?

Control

As you expand, you may have to relinquish control of some aspects of your business by delegating tasks you are accustomed to performing on your own. Are you prepared to do that? Do you have management in place to handle those tasks?

Experience

Do you have the experience required to successfully manage a business expansion? A business coach or business consultant can help you through this process. Cynthia Alloway, of Common Sense Business Solutions, has been through this process for a variety of clients and knows how to help you through these and other considerations and get you headed down the right path to expanded success.