6 Signs You Should Expand Your Small Business

If you’re an entrepreneur, then you understand that succeeding sometimes means taking thoughtful risks. If you’re thinking about how to expand your business, but want to be smart about it, then you know that growing your business before you’re ready can have serious negative consequences.

Knowing when to expand your business is an important part of your calculations, too. Whether you want to expand your staff, your product offerings, your customer base, your advertising and sales channels, or the physical footprint of your business, here’s how to know when you might be ready to grow your business.

And whether you decide to scale up now or later, your business needs to be protected from the unexpected. Reach out to Farm Bureau for advice on how to protect your business.

Sign #1: Your Bottom Line Is Solid

The first sign that you’re ready to expand is that you feel like you’re on firm footing. You can’t consider growing your small business until you are consistently meeting the most basic measures of success. But if your business is regularly meeting revenue and profit goals, and your cash flow is consistent, then you can consider exploring expansion. It’s time to start dreaming!

Sign #2: You Have a Strong Customer Base

If you have customers who love you, then that’s a great indication that it might be time to think about growing.

Not only do you have the customers you need to meet your revenue goals, but you also have loyal, regular customers. That’s an indication that your business is doing what it should be doing. The quality of your services or products is high, your customer care is top-notch and there is a continuous need for your product. You’ve proven your worth.

But don’t get ahead of yourself too quickly! Be aware that sudden spikes could be caused by outside forces, including trends in the market. Be sure that your increased customer base is solid by observing fluctuations in your business for at least a few months before making any expansion decisions.

Sign #3: There Is Future Potential

Do you see a bright future on the horizon? Not only is your business doing well, but you feel confident that this will continue. Perhaps you consistently have so much business that you’re not able to provide the quality that you want — you have long lines, you’re keeping waitlists or you have more work than your employees can handle. As long as this is steady (and not seasonal), you should consider expanding your business.

Here’s another factor to consider: How is your industry doing? The sector’s performance as a whole is important to consider when you’re thinking about expanding your small business. Is there a bright future ahead, or has something else popped up that could put your business in jeopardy? Weigh your prospects before you make any expansion decisions.

Sign #4: Your Customers Ask

Are your customers knocking on your door? They might be letting you know that you need to expand. Do they mention coming from a far distance? Do they remark on how crowded your location is? Do they talk about how they are no longer able to find the stock they are looking for?

Some of these existing customers could be good resources for you to tap into as you consider expanding. They may know of new customer bases you could reach out to or products that would be a hit. Get their feedback as you make your expansion plan.  

Sign #5: You Need More

The meaning of “more” may be different for every business, but you’ll likely know when you need it. One of the main benefits of expanding your business is the ability to have more space, more products and services or more staff to help take your business to the next level.

You may need more people because you’re overwhelmed or because you’re looking for talent with different strengths and skills. You may need to add offerings or advertising support if too much of your revenue comes from one product or account. Your floor may be too crowded or your storage space too packed with product.

Adding more of whatever you need helps create a broader base for your long-term success.

Sign #6: You Have Money

This may seem obvious: You don’t want to expand if you don’t have the financial strength to maintain your business. But if your profits are just sitting in an account, that money isn’t helping you grow. Look for opportunities to utilize those funds for business growth, such as equipment sales, real estate opportunities, hiring prospects and so on. Put your money to work for you!

Make a Plan

But before you jump into an expansion of your business, make a plan. Do some initial research and determine a way you can test the waters — perhaps by selling at a farmers market in an area where you’re looking to put a permanent location or by introducing a trial period for a new line of products.

You should also make sure you have the right team around you. Any current employees you have will be taking on additional pressure and responsibilities while you’re working on expanding, such as creating new systems, covering when you’re elsewhere or training new employees.

Having the right team will ensure that your expansion is a positive experience, and that it brings success to you and to your business.

Get the Right People on Your Team

Your team also includes your team of professionals — confer with them to ensure that you have everything in order with your finances and insurance coverage to make your expansion a success. Reach out to Farm Bureau today to get the support you need.