Businesses shrink and grow all of the time. It’s natural for a business to lose or gain traction over the years. Seasons can also play a large part in the success of a business, depending on the products or services offered. As your business begins to grow, you may be faced with the need to expand your business to accommodate a growth in success, higher customer demands, increasing sales, capitalization of opportunities, and more.
Before you decide to expand your business into a new market, to another store location, or just as a whole, ask yourself these questions to determine if it’s the right choice before you make the leap.
1. What is the goal of expanding your business?
If you don’t know why exactly you are expanding your business, or what your endgame is for increasing your market reach and adding a new store, you’ll be destined for failure without a clear path to get you there.
2. Is there a downside or loss of opportunity if I do not expand?
Expanding your business is a valid strategy to improve sales and promote success. In order to grasp the true potential of business expansion, you should look at more than the risks involved with expanding. You should also consider the loss of opportunity that would come with not expanding at all.
3. Am I capturing the max amount of business at my current location or business structure?
Unless your company is growing at a rapid rate, expanding too early could cause more problems than solutions. If your current setup isn’t nearing its maximum potential, expanding could result in a division of resources and manpower.
4. Am I running out of space for merchandise, resources, or employees?
If your business is physically running out of usable space, whether that’s for your merchandise, the resources needed to run the business, or if your employees are getting cramped, then it’s likely time to expand your business.
5. How will expanding affect my customers?
Will your customers get the same quality customer service as they always have, or will it be hindered as a result of a business expansion? Keeping your customers in mind is an important part of any business expansion.
6. What are the costs of an expanding your business and will profits continue to exceed the new costs?
Whether the business expansion’s costs are introductory or long-term, you should know whether or not the expansion of your business will result in an increase in revenue that will offset the new costs that are accrued.