Expanding your business is an exciting prospect, but it requires careful consideration and planning to achieve the next level. Factors like timing, location, cash flow, and staffing all determine whether your expansion plan is successful. As you think through your strategy, consider these key elements that will impact your small business growth.
Is there enough demand?
One of the most significant risks in planning a small business expansion is the level of demand for your product or service. You may be ready to open a new location or launch an e-commerce site, but are your customers also prepared?
"When you have regular customers that keep returning and a steady stream of new customers, you have proof that your product or service is driving ongoing demand," wrote Pay.com. "Once you know your demand is consistent, you can feel comfortable knowing that your customers will support your expansion."
You may find that you can't keep up with demand — an even more positive sign that your business is ready for expansion. If you're struggling to keep products in stock, find your establishment gets too crowded, or often feel short-staffed, those are good signs your business is stretched and ready to grow.
[Read more: 5 Quantifiable Ways to Determine It's Time to Grow or Expand Your Business]
What does expansion look like for your business?
Expansion doesn't necessarily mean opening a new storefront. Expansion can take many forms, so consider the various options available to your business to find the best fit. For instance, you could:
- Start selling online through an e-commerce page or social media.
- Add a new product line.
- Move to a bigger location.
- Try a pop-up store.
- Open a kiosk, food truck, or outpost.
These options come with different costs and marketing requirements. For instance, if you decide to open a second location, you'll need to consider its proximity to your first storefront, competition in the new neighborhood, and whether you're cannibalizing your customer base. Do some market research to determine which options are best for your company.
If you’re struggling to keep products in stock, find your establishment gets too crowded, or often feel short-staffed, those are good signs your business is stretched and ready to grow.
Do your finances support expansion?
Expanding can be expensive. Prepare a detailed budget covering all expansion costs, including marketing, staffing, and new equipment.
Cash flow is also important: Your existing cash flow may not give you enough to cover all your costs, but it should help provide a financial safety net for investment and growth. Consider your funding options, such as loans, savings, or investors to cover expansion costs.
How will you stay true to your brand?
As your business grows, it can become harder to maintain a consistent brand for your customers and your staff. Think about how you will keep the look and feel of your new location or website aligned with your existing branding. How will the customer experience feel familiar while simultaneously adapting to local preferences?
The same consideration should be paid to your employees, too. How will you translate the work culture you've created in a new setting?
"Working in expanded geographic locations can be daunting, as the management of teams becomes more challenging due to differences in time zones, cultural norms, and language barriers," wrote Upwork.
Marketing experts can help you figure out how to translate your brand to a new sales channel. Consider creating training and formal orientation programs to help enforce your company culture to new staff members.
[Read more: How 3 Startups Stay True to Their Roots While Expanding Into Mass Market Retailers]
Do you have the right team in place?
Speaking of staff members, when it comes time to expand, you can't do it alone. Small business owners wear many hats, but it's impossible to do everything, especially with a new sales channel in the mix.
Surround yourself with a team that you feel confident delegating to. This team may include business mentors, managers, temporary staff or fractional hires, or existing team members who have years of experience working with your business. Consider who will helm the ship at your existing business to keep everything running smoothly while your attention is elsewhere.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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