Business growth takes careful planning and is not something that will happen overnight. Opening a new store or increasing your range of products should not be decided on a whim. Company decisions should be made based upon different factors, including the logistical, financial, and even the emotional readiness of the business. Most industry experts comment that businesses should only consider expansion when there are clear untapped opportunities that can benefit the business.
Sometimes, a company will expand naturally, an echo of commerce trends or a particularly successful advertising venture. Whatever the reason for the substantial growth, there are five things that you should keep in the back of your mind.
Is your growth watering-down your brand ethos?
As companies grow, it can be incredibly tempting to ride the wave and revel in the increase of profit and recognition. However, this loss of site can result in a skew in company vision or cause detraction from the brand motto that helped launch the business during its germination.
As a business owner, it is up to you to ensure that your brand remains loyal to its roots and evolves in a way that is cohesive with the ideas and thinking that originally started the business.
Can you financially facilitate new premises or team members?
Growth is understandably desirable, but finances can often dictate whether your cash flow can support any additional investment that is necessary. It is imperative that finances are carefully studied and questions raised in regards to moving your business to a new office, storing business documents, new equipment, additional inventory, or new members of staff.
Before jumping in feet first, it is best practice to already have a proven a demand for your services, often determined by an extremely attractive net profit.
Will your business cope if there is reduced demand?
Even during the most positive periods of expansion for a business, there are times when unforeseen circumstances can change spending habits of customers. Wars and life-changing events explicably cause a huge change in the economy. For example, the tragedy of 7/11 aggravated the 2001 recession and was solidified by the Y2K bug scare. If your customers are unable to spend how they used to, can you be sure that their money will be spent on your products or services?
If your business has unlimited funds that can support growth, even in the light of reduced demand, growth in unfavourable circumstances will be no problem. However, chances are this is not the case, so make sure the economic state can support your growth.
What are your competitors achieving?
Perusing market intelligence should be an integral part in controlling and monitoring the expansion of your business. The information garnered will go a long way in providing you with clues not only about the market, but your competitors. Making sure you keep your finger of the pulse on your competitors can help give you the edge and benefit customers and your business alike.
If you notice that your competitors have launched a new service or product, as a business you have two choices; follow their lead or see how successful their new venture is. If their expansion is a washout, you know to steer clear from similar projects. However, if it turns out their idea was tangible, you can use your competitor’s lead to inspire your own ideas towards a similar undertaking.
Would you be happy to take a step back in some areas?
Most businesses are born of one individual or a small team. As the company blossoms, it will be essential to employ new staff to take over different roles. As a business owner, it can be very tough to delegate responsibilities to others. Once you were running out of your friends shed with two friends, and now you have a team of thirty and a new store opening. No matter how much you want to remain deeply involved, you are going to need to prepare yourself emotionally that you will need to relinquish certain aspects of the running of your company to others.
Although growth can be exciting, it is not always something that is good or desirable. Over the years, many start-ups have seen their businesses fail as a result of uncontrollable growth. For this reason, it is best to harness the tips above to ensure your expansion is incremental, slow, and steady.