For a small business owner, expanding your business can be a scary, yet exciting, topic. You want to expand, after all, expanding means more money but, you don’t want to expand if you can’t afford to or if the business isn’t there to support your expansion. So, how do you know when the right time to expand your business comes along? While there is no easy way to know when the right time is, there are several things that you can do and areas of your business that you can look at to determine when the right time is, or will be, to expand.
The first thing you need to do is to establish some growth markers to see if the market is right for you to expand your business, some of these markers include items like money and working capital, customer related issues, products and services, and employees. When you are establishing these markers for your business, you need to make sure that you choose the markers that will have a large effect on the performance of your employees, business, or customers and that can be measured easily. An example of these types of growth markers would be the conversion rate from visitors to customers on your business’ web site. This is something that is easy to track and calculate and can give you an accurate picture if your business is growing or not.
Another thing that you need to do is to completely understand your financials. Have your accountant go over the past year or two of your financial statements to see where the highest profit margin was, and where there might have been any cash problems. Once you know the highs and lows of your working capital, you can then go back and see what the triggers were that caused the rise, or fall, of your cash flow during those times.
Once you understand your financials, and you have some growth markers in place, do some market research on your competition. Find out what they are doing and what new products they might be developing and see how you can use this information to shift the power from your customer base to your business. When you are looking at your competition, look at the ones that are the main players against your company. Once you have them in mind, compare your business to theirs and see where they might be excelling in areas that your business isn’t. This way, you can come up with a list of items that need to change in your business to create the right time to expand. You should also do some research on the market that you are in as well. For example, are there new trends that will spark customers to purchase your products or are there trends that will cause them to not purchase your products. Know your customer base and know the market that they fit into.
Consider getting feedback from your customers through customer surveys or suggestion box. The trick is to find a product or item that you can give away to those who take the survey so you will be able to gain the information that you needed quickly. Once you have your trick in place to get people to take the survey, you can start to analyze the data when it comes in and see where you need to make changes in your business and where you don’t.
Expand New Means
Once you have all of these items in place and you have the information that you need, you can see where your business stacks up with customers and with the competition. If you find that you need to make some changes in your business structure or products, this is the time to do it so you can get on the road to growth. If you find that it is the right time to grow, look into a merchant account with Merchant Advisors for a business cash advance to gain the working capital that you need to expand today.