If your company has seen consistent success for years, and the space you have just isn’t cutting it for all the customers lining up at your door, it may be time to expand your business. Perhaps it is time to take over an adjoining space or possibly open up an entirely new location or factory.
There are many things to consider when expanding: location, staffing, financing, inventory. All of these elements have cost implications. Read on to figure out whether expansion is the right decision for you.
You’ll need to hire extra staff if you open a new location, and you won’t be able to oversee their work all the time because you can’t be in two places at once. This can be difficult for some entrepreneurs to face, especially if the business is family-run. Hiring outside staff is an unknown and comes with some risk. But not expanding might be turning your back on significant potential profit. Consider the risk and figure out what’s right for your small business.
Using word-of-mouth is an effective way to find new employees. Ask the people you already trust if they have friends who might be looking for work and who might be a good fit for your company.
You’ll need increasingly more inventory as you expand the number of locations of your business. Figure out if you can afford that. If a factory is responsible for churning out new inventory, calculate if it’s even possible to do that—and how much it will cost you. Sometimes you may not have enough cash to pay for an influx of inventory. In such cases, securing short-term financing may do the trick.
Related Article: 5 Ways to Finance Your Business Expansion
Maybe the current location of your business isn’t very central, so aside from your regulars, new customers just don’t seem to come through your door. If you’re confident a change in location will bring in more customers, it may be a good idea. Shop around for locations—this is important to driving traffic to your store.
If you think it’s time to expand your business, but you’re unsure about opening up new locations, consider having other retail stores carry your product. Then you’ll have a better idea of how your product would be received if you do expand. Furthermore, if you can get a huge, well-known store like Target or Wal-Mart to carry your product, you could make even more money than if you simply opened up another retail location.
Expanding is a risky decision—one that can come with high reward or lots of regret. Consider the options before you take the plunge. You could make a huge amount of profit if you plan ahead.