Starting a business is a huge endeavor that most people never take. And once you’re in business, deciding it’s time to expand can also feel like a big jump. After all, there are pros and cons to growing your business.
Most expansions involve you spending money, whether that’s to hire people, branch out into new products, or upgrade your office space. Of course, there could also be great financial rewards for taking the leap and expanding. Here’s how to tell whether you’re ready for the next step – plus strategies to help you develop your business and reach that next level.
6 Signs You're Ready to Expand Your Business
1. You’re Driving Consistent Profits
Whether you’re planning on paying for your expansion out of pocket or looking to get a loan, it’s important that you have the financials to back it all up. To analyze your profits, you can check your net income by subtracting expenses from your business's gross income. That will give you an understanding of how much you’re actually earning after bills.
You should do this practice with your numbers from recent months, as well as the previous years. Check that you’ve earned a consistent and growing profit over the long term to ensure you’re really ready to expand.
2. You Have a Stable Customer Base
Your customers are a key indicator of the health of your business. When you have regular customers that keep returning and a steady stream of new customers, you have proof that your product or service is driving ongoing demand. Once you know your demand is consistent, you can feel comfortable knowing that your customers will support your expansion.
3. You Can’t Match Your Demand
You might think there’s no such thing as too many sales, but it is possible to hit a point where you have more customers than you’re equipped to take care of. This can come in several forms.
Perhaps you have more clients than you can serve and need another set of hands to divide the labor up. You may notice that your space is too small to accommodate the people inside.
Or, you might find that your product sells out consistently, leaving some paying customers empty-handed. All of these are signs that you’re limiting your growth and can only reach the next level in business if you expand.
4. Market Research Supports Your Expansion
Market research allows you to test your new ideas before you actually put them in place. This can save you time and money, so don’t skip this step in your expansion.
Reach out to your target market and ask if they’d answer a few questions. Then, ask them if they’d support your new location, expanded services, or new products.
You can even ask if there’s anything they’d like to see you do differently. This allows you to tailor the product to the people who will buy it, and break down barriers before they even occur.
5. You’re Missing the Necessary Skills
As your small business grows, you wear many hats. Eventually, some of those hats won’t fit quite right. For example, you might have been doing the bookkeeping for your photography business on your own. As your business grows, though, tax season is more confusing than ever. In other words, you lack the skills to keep up.
There’s nothing wrong with having a limited skillset. People pay you for your expertise in one area - you aren’t supposed to be a jack of all trades. If you find that your skills (or lack thereof) are holding back your business, it might be time to expand.
6. Your Customers Are Asking For More
Your customers are at the heart of your business. They’ll tell you when they want more or less of something. They’ll suggest new products or services they’d like to buy from you. They’ll tell you when your storefront is too small.
It may not always be obvious. For example, your customers might mention how far they traveled to get your products. If multiple people are driving from the next city over, it might be time to open a location in their area.
Taking It to the Next Level: 6 Strategies to Expand Your Business
1. Boost Your Payment System
One of the quickest ways to expand your business is to allow people to pay you in more ways. By upgrading your payment system, you give your customers more payment methods so you can capture more business and, ultimately, grow.
With Pay.com, you can get quick approval and start adding payment methods right away. Using the Pay Dashboard, you can set up a customized checkout page, then add everything from different credit cards to PayPal. You can even track payments, check analytics, and review reports so that you have a complete understanding of your payments.
2. Hire Helpers
Making the decision to bring other people into your business can be stressful. However, if you’re working overtime doing the jobs of multiple people, it’s time to take that leap.
You might hire someone because you need another set of hands that can physically do the work. Or, you may need to hire an expert with training and knowledge in a specific area.
Whoever you hire, they’ll help double your output, allowing you to serve more customers and earn more money. Just be sure to properly interview and vet candidates so you hire the right person. You don’t want to add more work to your plate by hiring someone unfit for the job.
3. Develop a New Offer
If your customers are consistently telling you that they need a specific service or product, it might be the right time to develop that offer. Or, you may decide to significantly revamp your existing product or service to better suit what your customers need.
Creating something new is easier said than done. Whether you provide a product or service, you’ll need to spend time refining the concept. You may even need to hire product development specialists to help it come together.
Once you’ve finalized the design, you’ll need to put physical items into production or spend the time and money required to set up services and processes around new services. You’ll also need to launch the offer and market it so that customers know it’s available for purchase.
4. Get a New Location
Whether you sell online or in person, you may reach a time when you need more space. This is obvious when you sell products – if you’re running out of storage space, it’s time to upsize. If you sell a service, you may need to increase your office space to accommodate more employees. Perhaps you want to keep your existing office and add a new location.
Getting a new space involves a lot of moving pieces. Unless you’re paying out of pocket, you’ll need to get a business loan to pay for the building. If you’re upsizing, you might need to hire movers to help you get set up. Or, if it’s a totally new location, you’ll need to furnish the space and buy all the tech your business needs.
Finally, be sure to advertise your new space to your customers. If it’s a storefront, get them excited about it by having a grand opening. If you run a virtual business, you can still announce the new space in your email updates. Let people know your business is expanding so they know how important their support is.
5. Target a New Market
If you’ve maxed your current market, it could be time to push into a new market altogether. In other words, you can look for new customers to sell your existing products to.
This can happen in a few ways. First, you might look at different market segments that already exist within your current location. Or, you can branch out by opening a new branch in a new location.
If you sell online, you might expand your offering to a new niche. For example, if you create websites for weight loss coaches, you might extend your services to other wellness experts. You could also try multichannel retailing.
6. Acquire Another Business
You might get the opportunity to purchase an existing business. While this is a huge decision, it could double or triple your profits from the moment you take over. This could be a risky decision, but it’s one with lots of potential.
To avoid a bad investment, make sure you’ve thoroughly reviewed the new business’s financials. They should have steady profits, successful processes, a solid customer base, and little to no debt.
What to Look Out for When You Start Expanding Your Business
There are a few things to be aware of before you expand. First, make sure you know what your goals are with the expansion. Without a clear vision, you may get lost in the process and waste time and money.
Next, be sure that your finances and customer base will truly support the expansion. Don’t base your decision to grow on a few months of great results. You should have at least a year of consistent business to support your decision.
Lastly, take your time with the process. It’s okay to act slowly as you conduct market research, review loan options, and consider hiring candidates. Get in touch with experts to support your choices. Check in with yourself to ensure it all aligns with your goals.
The Bottom Line: Are You Ready to Expand Your Business?
Deciding to expand your business is an exciting, though sometimes stressful, decision. As long as you’ve done the math and have consistent profit and customer traffic, you’re likely ready for this next step. Whether you’re adding a new location or a new hire, you’ll be glad you took the risk.
One of the fastest ways to grow your business is by investing in a new and improved payment system like Pay.com. With the Pay Dashboard, you can easily add a variety of payment methods to serve every customer. If your customer doesn’t want to check out via your website, you can send them a direct request through Pay Links or manually enter their details, allowing you to get paid however is easiest.
Click here to find out how you can get started with Pay.com.