As an entrepreneur, you are always looking for the next chance to grow your business. Sometimes, that opportunity is clear, but other times you might not know that your business needs to be expanded. Whichever the case, your business always speaks to you in a language that only you can understand. Expansion can take many forms; getting a bigger space, increasing your personnel, increasing your business capacity, or simply branching out to related businesses.
The expansion should not be impulsive; it should be a well-orchestrated plan that takes into account various aspects of the business such as cash flow, customers, human resource, space and many other logistics. To put things into perspective, here are ten clear indicators that you need to expand your business.
You Have Amassed a Loyal Customer Base
One of the indicators that you need to expand your business is when you finally have a portfolio of repeat customers. A loyal customer following means that customers are satisfied with your product or service. It also means that there is still a ready demand. A good entrepreneur will cease such an opportunity with gusto and make the most of the situation.
Steady and Positive Cash Flow
Cash flow means the inflow and outflow of money in your business. Business gurus say that cash flow is a better measure of business success than profit. Positive cash flow indicates that the money coming into your business is more than that going out. If you have a positive cash flow, your business might have the required disposable income to fund your expansion without necessarily inflicting a fatal blow to your business.
Be careful, however, not to jump at expansion the moment your business records a positive cash flow. The best moment to launch an expansion plan is when your cash flow statements have remained positive for a while- say two years. At this point, you are sure that the business is doing well and not just that you have had a good month.
Customers tell you to expand
There is a common saying in the world of business that “the customer is always right.” To some, this statement is inaccurate and a tinge cliché, but to an intelligent business person, the customers’ needs come first. When your customers tell you to expand, oblige happily. It does not become clearer than that.
It is the customer that knows what they want. If they tell you to expand, they have experienced an inconvenience, although not fatal, that they would like to see corrected. Perhaps the only cautionary statement is not to act on the words of a few new clients. Do your own research and assess the viability of expansion. If necessary, expand.
You have enough manpower/human resource
At some point in your business, your team of employees might seem to have all their roles nailed down. Workflows with ease, and there seems to be a lot of free time. Your business is running efficiently, and also it might be time to expand.
There is more business than you can handle
If you are constantly turning away client because you lack the capacity to handle their business, it might be time to expand. In this scenario, there is a demand for the product but limited supply. Expanding your business to handle more business will help level the economic in-equilibrium.
Your space seems to be cramped up
With time, businesses sometimes grow at an alarming rate. When this happens, a business owner may find that space they once thought as huge is not enough to accommodate the products, staff and or clients. You might need to move to a larger location. Sometimes, the need to find a larger space arises from the calibre of clients you handle.
Perhaps you are in the business of making coffee. You have done so well you have a brand as a business. As much as people like your coffee, there are still a few many souls out there who just want tea. Since you already have the brand name, you might as well venture into tea. Better yet, you can start making pastries to go with the coffee everyone likes.
You lack the skill set to handle new business
Take an example of a laptop manufacturer who takes pride in manufacturing all the constituent parts of the machine. New technology comes and sweeps over the market and is gobbled by both the market and the competition. This manufacturer does not have a clue of how to incorporate the technology in their products. Just down the street is a small business owner who has the required skills. The prudent thing for the manufacturer to do is to find a way to entice the business owner to lend them a hand. Expansion is necessary to incorporate this new technology.
Your business is surviving on a single client
It may be time to expand if you only collect revenue from a single client. A business needs to have several streams of income to thrive.
You have been consistently profitable
Lastly, if you are continually making profits, you should try your hand in more ventures.
Business expansion is all about timing. Above are the ten most appropriate moments to start a plan for expansion. In a phrase, they may be summed up as “wait, plan and expand”.