At a certain point, every business owner faces a big decision: to expand or not to expand? While this might seem like a straightforward choice for some professionals, the reality is that pulling off a successful business expansion is quite complex and nuanced. Indeed, when handled poorly, opening up a new branch or location can actually halt a company’s forward momentum and create a myriad of serious problems for inexperienced business leaders. Given all that, today we’re going to highlight four signs that proves your company is ready for growth. Check them out here so you can avoid pushing the “expansion button” to soon!
Sustainable Profit Streams
High revenue does not necessarily indicate that a company is prepared to expand. Though a company does need to generate serious revenue to expand, it’s essential that the profit a company creates comes from multiple, sustainable sources. Businesses that aren’t diverse –– that put all of their eggs in one basket –– might be able to turn a profit, but they aren’t primed for expansion. Maximize your budget and your income to ensure long-term success.
Low Employee Turnover
In order to open up new business locations, an entrepreneur needs to have a team of dependable employees behind them. And that means low employee turnover is crucial to expansion. Without a reliable staff that understands company policies and best practices, a business owner will struggle to deal with the added responsibilities of managing multiple branches. In such scenarios, entrepreneurs have no choice but to delegate –– so make sure you’re only dealing with trusted, capable professionals.
High demand is a prerequisite for expansion. Without strong interest from a surfeit of new consumers, the expansion process could prove very difficult. Note that it may make sense to move into areas where there are fewer direct competitors to your business.
Some business owners spend so much time trying to determine if they’re capable of opening up a new branch or location that they never stop to ask themselves an important question: do they want to expand in the first place? Sure, growing a business could lead to increased revenue and more money. But owning a large company comes with its own set of challenges and problems. Not everyone is ready or willing to tackle those issues. Ambition can be a powerful tool, but not all entrepreneurs share the same life goals. It’s okay to pass on an expansion opportunity if you don’t have the drive to make it work.
The Bottom Line
Whether your company manufactures specialty construction barricades or you run a sporting-goods store, make sure to keep these factors in mind if you’re considering expansion. Expansion is a big opportunity, but a big challenge as well!