Building an Empire: Six Key Points to Consider Before You Decide to Expand Your Business
The goal of any competitive business is to succeed and attract as many customers as possible, and the way that businesses are able to do this effectively is if they are able to expand their operations on a wider scale. The concept of expansion isn’t exactly a new idea given that this was practiced since ancient times when merchants across the world sought to enhance their fortunes by establishing outposts of their enterprises in various places as human civilization gradually evolved and dared to cross multiple undiscovered borders.
But what most people don’t know is that expanding a business from one location to several places requires a considerable amount of time, money, manpower, and other essential elements in order for the goal to be executed successfully. Business expansion is not something that entrepreneurs should take lightly because if they don’t have a serious mindset about this, then they could stand to lose a lot of their resources. That being said, a commercial establishment needs to consider a few things before deciding to expand.
Business owners always need to look at the bigger picture if they should decide to branch out their ventures in other key locations. While larger companies may have a slight advantage in expanding due to the amount of resources they might have, smaller businesses also have a fighting chance in turning their operations into much bigger scale than when they first started. So if you’re planning to expand your business into other territories, here are some vital points for you to consider before making that big leap.
Are you consistently attaining your goals?
When a business is able to meet their short-term goals consistently, then it’s a good indicator that they are ready to hit that long-term goal or milestone of expanding their operations into other locations. Companies are prime for expansion when they are strong enough to weather any obstacles and still manage to be fiscally stable after every challenge they encounter along the way. And if you’re looking to expand your business, then you should first need to determine whether you were able to cross some things off your list.
This is a crucial point for you to consider because you cannot hope to push forward with any expansion plan unless you know that your intended goals were successfully accomplished when you first started your business. However, you must still tread with caution even if your short-term goals were met since it’s one thing to complete something in a short timeframe compared to something that will take a considerable amount of time. Be very prudent with your decisions since you need to steer your business in the right direction at all times.
What’s your financial situation like?
Another vital cornerstone that you need to consider is taking stock of your company’s financial status. Expanding a business—whether you intend on opening just one branch or perhaps multiple outlets—all boils down to whether a company is financially equipped to handle the expenses that come with such a plan. Companies that are struggling to make ends meet should be discouraged from expanding because their primary focus should be keeping their business afloat and avoid the ever-present threat of complete bankruptcy.
Companies who are relatively stable but still have incurring debts should not think about expanding since it would take them a really long time to recover from their outstanding deficits. Before you decide to expand your business venture, you should thoroughly review your financial records and see whether you’re on stable ground. If you are able to determine that your business is fiscally capable of handling a modest or massive business expansion, then you should plan a detailed strategy to know how your funds will be spent.
Can you handle the logistics of expansion?
Apart from worry about your finances, another key element that should be on your priority list should be whether your company is able to handle the coordination of a business expansion. Understanding the logistics of a commercial aggrandizement is neccessary because there are so many factors that go into the expansion of a business from one place to another. Things such as infrastructure assessment, location scouting, equipment acquisition, and talent recruitment all come into play as far as logistics are concerned.
You’re not just expected to map out all of the essential details, but you are also responsible for ensuring that everything will run smoothly according to plan. A company with relatively poor management skills and lack of experience in handling the logistics of a complex project should hold off on expanding until they are ready to do so. But if your company has a relatively decent track record of handling business logistics without any hiccups during the entire process, then a commercial expansion should not be a problem for you at all.
Does your team support the idea of expanding?
It’s one thing for you to be enthusiastic about the idea of expanding your company, but you should also think about whether your colleagues also share the same sentiments that you have. The existence and survival of a business is dependent on the workforce that keeps it alive, and if they have reservations about the idea of expanding the business, then you need to address that issue first before you even think about searching for new places to establish your company. You need to have your subordinates on your side before you press forward.
However, it can become tricky if part of your workforce is supportive of an expansion while the other is hesitant about the idea. A division of opinion between your employees could prove to be your undoing if you should decide that the majority will win. Your intended plans for expansion hinges on a united front, and you should strive to unite your employees and make them understand how a business expansion can benefit everyone in the long run. Once you have accomplished this, then you’re good to go in executing your expansion.
Are your business rivals branching out?
Chances are, you’re not the only one thinking of expanding your business to potentially lucrative markets, and this is why you should keep a close eye on your competitors in the market. If you hear word of your business rivals intending to expand their business to other locations, then you should take that as a sign that you must also take the same measures lest you end up lagging behind from your fiercest competitors. But just because your rivals are planning on expanding doesn’t mean you should immediately jump the gun.
While it’s a common piece of advice for entrepreneurs to always be one step ahead of your competitors, you should always be strategic about it and anticipate every move while also comprehending the possible consequences of whatever gameplay you will decide to deploy in every conceivable scenario. Bear in mind that if it’s beneficial for your company to expand before your competitors, then you should do so. Otherwise, it’s merely going to be a waste of your resources to expand if your rivals don’t even have plans to expand themselves.
Is there a demand from your consumers?
Whenever there’s a high demand from consumers, companies are obliged to respond to the demand so that the customers will be satisfied and in turn, their sales reports will see a healthy rise in profits. Consumer demand is another core element that must be taken into consideration before you decide to expand your business. In fact, you should be very attentive to consumer trends because your core demographics are the ones who help drive sales for your company, and an expansion could easily become a win-win situation.
When other locations hear good word of mouth about your business and the people in these untapped areas express a desire to have your presence be known in their neighborhood, then it’s something that you really can’t ignore because that’s going to be good for your company’s bottom line. Should you decide to heed the call of your potential customer base, you should first scout the locations to see whether your company can seamlessly make the transition and whether the demand is truly strong enough to warrant an expansion.