Every entrepreneur’s ultimate dream is to grow his business. We work hard and strive to create bigger markets, increase equity, and establish our brand. These are the composite needed for business expansion. However, some business owners would try to keep it small and cozy, but you can expect Brisbane bookkeepers and accountants to urge you to expand when the time is right. Sometimes business growth is essential for the business to survive. It’s either you go big when you’re ready for it, or somebody else will take the opportunity that is at your doorstep.
Signs that your Business is Ready for Expansion
So how will you know that you are ready for the big business re-launch? Here are four key signs that your business is ready to enter a new phase and a bigger territory;
Solid Capital Buildup – You have grown your liquid business equity from the consistent positive cash flow over a significant period of time. The best way to use the ready business capital is to invest in long term assets that will grow your business and generate positive cash flow. Cash or money is a liquid asset and it is always better to use business assets than to let it stay idle and unproductive.
Profit is Consistent – Observance of profitability over several years, despite seasons, business threats, and changing market behavior is a strong sign that you are ready for a business expansion. Consistent profitability is an indication that your business is stable enough and is ready to take on a bigger market.
Increasing Demand – Your production line is constantly booked, your shelves need constant replenishment, and your sales have been on the positive trend for sometime now. There are two things you can do, drop some customers or step up to accommodate them all. If the demand forecast is on the positive, then by all means gear up for expansion.
Established Market Share – Establishing customer loyalty and a significant market share is important for a successful business expansion. As you are testing new waters, you will need the steady cash inflow of your solid customer base. An established market share is also significant in your word of mouth promotion and brand recognition.
A Growing Industry – Despite a good business standing and meeting all four indications for expansion, pouring in more capital is not advised if your industry is seeing an imminent end. Soda and carbonated drink companies have been enjoying robust business for several decades now, but the increasing awareness of its role in diabetes and obesity hinders its producers in putting anymore funds to it. Instead, we see that they are trying to diversify their business.
Basic Requirements for a Business Expansion
Taking the business expansion steps is a lot like starting all over again. You need to work hard in order to establish new business parameters. Here are some of the basic requirements you need to have before you can proceed with the expansion;
Entrepreneurial and Managerial Skills – With a larger business operation, you could be hiring more people and experts of their fields. Your expansion could mean opening stores, offices, or manufacturing plants in several locations. It would also mean dealing with bigger suppliers and more dealers. You’ve tested the waters with your small scale business, but make sure that you are equipped with the entrepreneurial and managerial skills needed by a larger organization.
In-Depth Knowledge of the Business – Going bigger means exposure to more customers, to the industry and to your competitors. You might be an expert dealing with your current customers, but not when it comes to another market segment. The same demographics from different locations have different set of buying behaviors. Do you have enough suppliers for your ramped up production? Try to learn everything about your industry and how you will conduct business following the big change.
Liquid Capital to Sustain Growth – Make sure that you have enough business funding to sustain the expansion. Growth efforts will fall without sufficient financial backing. You will need cash to sustain the demand of your new customers, marketing, manpower acquisition, bigger warehousing, and manufacturing equipment. A Brisbane bookkeeper or business coach can help you construct a detailed expansion plan and growth guide that will fit your financial capacity.
The Right Team – Entrepreneurs know that businesses run better with a great team rather than under a dominant leader. A business expansion is a great undertaking and will need the work and skills of the right people who are skilled, dedicated, and working to a singular objective.
Often, businessmen become too engrossed with the everyday routine of managing and running their business that they fail to see the opportunity of growth. If you have a hunch that tells you are ready for a big business spurt, you can go the compulsive way and plan on your expansion. Or you can go the scientific and smart way by consulting the experts like your Brisbane bookkeeper or business coach.