How to Know When It’s Time to Expand Your Business
Love is simple — “when you know, you know.” Your relationship with your business, however, is much more complicated. And knowing exactly when to expand your business is a big question with make or break outcomes. Push your business too soon, and it might just go up in flames. Take things too slow, and you could miss out big time. Somewhere in the middle lies the perfect situation to expand your business — a "Goldilocks-approved" bowl of opportunity waiting to be devoured. But how do you know when your business is ready to take things to the next level? Initial expansion was glaringly obvious. When there was no more room in the garage for your company and the sedan, it made sense to rent office space. When you found yourself taking a 27-minute morning coffee break while the computer booted up, you knew it was time to find some decent hardware. Yet when your business is further along, the telltale signs aren’t quite as apparent. You need to do a bit of data digging, a little number crunching, and some business planning before presto — you’ll know it’s time to expand the business. So what indicators should you be looking for while you evaluate your business? There a quite a few signs , but some are more significant than others. Comparable to love at first sight, if you see any of the following four signs, you’ll know it’s expansion time.
1. Too Much Business, Too Little Time
Sounds like a nice problem to have, right? Too much business can start as pleasant, but over time it soon escalates to exhaustion and burnout. Not just for you, either. With long lines and long waits, customer morale begins to decline, too. If you find yourself working after-hours or turning away customers, now could be a prime time to expand your business. Depending on your unique situation, there are several ways you could strategically grow the business. Do customers consistently have to wait for service? Consider opening a second store. Understaffed and overworked? Hire extra help — whether that’s full-time or seasonal. Never can find time for a break? Look to bring on a partner. Too much business is a good dilemma if you’re ready to expand to solve the problem.
2. Demand Is Trumping Supply
Think back to your ECON 101 college days. The only thing you likely remember is your professor shouting, “Supply and demand!” while fiercely scribbling two curves on the blackboard. Now, it's time to apply that lesson to your business. Timing is everything. If you launch a product and the market loves it, you may have to expand your business faster than you’d like. Think if Bird and Lime had landed just a few electric scooters in cities with hundreds of thousands of interested customers. Day after day, if only a handful of people could get access to the product, it couldn’t gain the necessary traction to reach the broader market. It might have never expanded. Here's another example: Hruska's Kolaches . This unique breakfast experience started in Provo, Utah, but crazy lines stretched out the door — if you weren’t waiting outside before they opened, you were out of luck. Clearly, the demand was greater than this single store could supply. So, they opened a second location. Then a third. See: The 20 Fastest Growing Industries for 2020 and Beyond
3. Cash Is Getting Lazy
What’s your business savings account interest rate? Is it a little over 1 percent? Maybe over 2 percent if you're lucky? Capital sitting in your bank account isn’t doing your business much good. Yes, it’s important to have an emergency cushion for a rainy month or even a stormy year, but beyond that, it’s just lazy cash. If you have lazy cash, it’s time to expand your business. Get your money hustling. Use your extra capital to make upgrades, repair or replace old machinery, invest in real estate, expand your team, boost your marketing campaigns ... the list goes on.
4. Complacency Is Spreading
Complacency is the silent killer of small businesses. It often goes unnoticed for long periods of time, preventing companies from pushing beyond acceptable expectations to reach their full potential. To survive, you need to destroy complacency at the roots. When things are going “good enough” and run-of-the-mill becomes passable, you know you’re in trouble. If you begin to hear this language or see these signs, it’s time to relight the flame of passion again with healthy expansion. Growth is demanding, growth is uncomfortable, growth is hard — but growth is also exciting. It’s also the best way to uproot complacency. If you’ve noticed any of these four signs in your own business, it’s time to expand. Some of these red flags might not jump out at you. They’ll require a bit of digging on your part. But “when you know, you know,”— and that means it’s time for expansion. More From Seek
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