How to Know When It's Time to Expand Your Business

Every small business owner simultaneously looks forward to and dreads reaching the point

where their business needs to expand. Can they afford it? Will the business be stretched too thin?

Is it really the right time? The first step to a successful small business expansion is to correctly identify when your business

has reached the point where growing, diversifying, and restructuring is necessary. There are

several points in a business's lifecycle where expansion becomes necessary, including the

examples listed below:

● Your Business Needs More Capital than It Brings in – one of the most awkward

situations a business can be in is when it is succeeding in bringing in customers (and

money), but it still doesn't generate enough capital to support itself. This is a dangerous

place for a small business to find itself in, and one that usually isn't easy to get out of.

Moving past this phase means either slimming down (and thus losing customers and

income), or courting new investors who can provide capital to keep the company afloat,

and thus expand and diversify operations so that the business can become self-sustaining. ● You've Reached the Limit of Your Market – for businesses in niche markets, one of

the pitfalls of success is reaching the end point of what that market can sustain. If your

business's products have a limited potential customer base and no way to diversify into

other products, the level of growth it can achieve is limited by the parameters of its

marketplace. When your business ends up in this situation, the only option is to expand

into other products and markets in order to sustain its growth. ● There's More Work than Your Employees Can Handle – while more customers are

always a good thing, your business will reach a point where its current employees won't

be able to effectively handle any more work. At that point, it becomes a choice between

accepting a decline in the quality of the work your company does (never a good idea) or

expanding operations, either by hiring more workers or outsourcing additional work to an

answering service, call center, or other contractor. ● There Are Too Many Employees for Your Management – part of the process of hiring

more employees to handle all the work that needs to be done is that, eventually, there will

be more workers than your current management structure can handle. When that happens,

it often means that it's time to restructure the business's management plan. Sometimes

this just means hiring more managers or promoting current staff members, but other times

it will require more expansive changes, such as creating new departments and changing

the way that work is assigned and handled. Has your business reached any of these roadblocks? If so, then it is probably time to start

seriously considering expanding. By analyzing your business's strengths and its available capital,

come up with a vision for where you want to take it in the future, and how you can execute that

plan.