In the past, we’ve provided you with tips on how you can grow your small business successfully, but in this post, we aim to tackle the question that many small business owners find themselves asking: “How will I know when it’s the right time to expand?” Choosing to expand your business can be a risky decision, so it’s vital that you make all the necessary considerations before taking the plunge.
In the past, we’ve provided you with tips on how you can grow your small business successfully, but in this post, we aim to tackle the question that many small business owners find themselves asking: “How will I know when it’s the right time to expand?” Choosing to expand your business can be a risky decision, so it’s vital that you make all the necessary considerations before taking the plunge. However, it can all become a little overwhelming, which can leave you feeling unsure and nervous, especially when it comes to knowing when it’s a suitable time to go ahead and expand. If the idea of taking your small business to new heights sounds appealing, look out for these five common triggers that will confirm whether or not it is indeed the right time for you to take things to the next level.
Trigger #1: Unable to keep up with demands
If business is booming, it’s a clear indication that you’ve garnered a loyal customer base and demand is bound to continue climbing. If, as a result, you and your employees are unable to keep up with the growing demand, that’s usually a sure-fire sign that it’s time to expand. It can be irreversibly damaging to your business if customers start turning to your competitors because your business cannot meet their needs, is not delivering on time or sees a decline in quality. If the increase in demand and pressure is causing you to make poor business decisions, it’s most definitely a good time to think about upping your game through expansion.
Trigger #2: Your competitors are expanding
It’s always important to keep your finger on the pulse and part of this means constantly monitoring the latest trends in your specific market, as well as being aware of what your competitors are doing. If your competitors are spreading their wings or they’re starting to steal business from you, you should seriously consider the possibility of expansion. This doesn’t mean that you should make the exact same moves as your competitors do in every instance, but when it comes to growing their business, it’s worthwhile at least evaluating your own situation.
Trigger #3: Customers are encouraging you to grow
If your customers are asking you to expand your business, there’s a very good chance that you’re doing something right. That encouragement is likely to be coming from the fact that your customers believe in your brand/product/service and want you to continue going from strength to strength and satisfying other customers. In many cases, it’s the customers who identify the potential to expand before even the business does, so if you’re in a position to consider expanding, there’s no time like the present (especially if you have people cheering you and your business on).
Trigger #4: Significant changes in the market place
As mentioned, making sure you stay up-to-date with changes and happenings in your market is key to maintaining your business’s success. If the industry you’re in is expanding, it’s most likely in your best interest to keep up and consider growing as well. Change indicates things are moving forward and you’d be remiss not to keep up – the last thing you want is to get left behind and miss a great opportunity to make your business even more successful.
Trigger #5: Stable, positive cash flow
If your business has been profitable for at least three years and its cash flow is stable and positive, this may make the perfect foundation for expansion. There are also other factors to consider, but when it comes to the financial side of things, this is definitely something to look closely at. If you’re not managing your cash flow wisely, expanding should be the last thing on your agenda.
Deciding to expand your small business should not be a decision that is taken lightly and it’s often more about the whenthan the how. Rest assured though, if and when you do decide to grow your company, Sage One will be there with you every step of the way, offering you the financial support you need to soar.
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