Business expansion is every young entrepreneur’s dream. Yet, there’s always a chance that even the most pleasant of dreams will quickly turn into a complete nightmare. Expanding too fast too soon will only break the bank and gain little in return. Patience is a virtue, after all. One must be certain that there’s an actual need for expansion as well as the funds and infrastructure to back it all up. This, however, takes careful planning and consideration, which is so often overlooked. Therefore, here are some of the best ways to ensure that your business expansion goes as planned, to help you rest easy at night.
1. Conduct Market Research
Before making the first step, you need to make sure that there actually is a great demand for your products or services on the market. Otherwise, it would be foolish to commit to an expansion if there’s no prior need for it. You probably already know the situation on your current market, but if you’re planning on expanding overseas or in a foreign country then you may want to check on a few things first. Namely, if there’s a niche for your particular business in a foreign country you need to conduct market research on the desirability and demand of your products there. Perhaps there’s a cultural difference in place and there’s no demand for your products whatsoever, hence there’s a niche in the market there in the first place, or you could potentially be sitting on a goldmine. Either way, you need to make sure that you’re walking on solid ground first, instead of taking a leap of faith.
2. Plan Ahead
There’s no folding once you’ve gone all in. You need to plan at least one or two steps ahead and carefully assert your situation. Knowing your limitations as well as the necessary finances required will make a world of difference when the expansion gets underway. Try to anticipate and predict the number of staff you’re going to recruit once the said expansion has started. How many of them can you train in that particular time-frame? Is it feasible? Estimate the costs of loaning or acquiring additional office space, as well as the needed equipment, furniture and other resources. Stay objective while making growth and cash flow projections or you may find yourself in an awkward situation in the future. For this reason always have a plan B if things go terribly wrong. Also, consider that in certain cases there might be some downtime involved so don’t forget to keep that in mind.
3. Stick To The Deadline
Make a deadline and stick to it, as any minor setbacks will end up costing you money for each day a project takes longer to complete. Motivating your own workers is the easy part, but chances are you’ve paid another company to do the job and that is a totally different ball game. For these kinds of situations companies often opt for something called surety bonds to protect their interests. What is a surety bond, you may ask? Well, long story short, a surety bond is a sort of insurance policy you make with another company to whom you’ve contracted out a certain job. If the deadlines are not met, or they’ve breached the contract and therefore the job isn’t completed, they have to pay the insurance policy plus all of the legal fees of the whole process.
4. Hire The Right Talent
Hiring the right kind of people goes without saying. Though, this is almost always easier said than done. Sometimes you’ll find yourself with a talented worker with a mentality that does not fit your company’s culture at all. Especially in the case of an expansion you want to hire employees who have something to contribute to the company and help it grow and prosper in the long run, some who aren’t afraid of having bold ideas and to take challenges head on. Versatility is also a heavily sought out trait for your workers, as when an expansion does occur you want your old loyal employees climbing up the ladder. Who best to manage a specific segment of your business than someone who’s already been doing it in the past? This is exactly why you need those young, ambitious employees who take pride in their work and do it with great passion and vigour.
5. Sort Out Your Finances
Of course, the whole plan can fall through if you cannot sort out your finances and acquire the necessary funds for this massive project. If finances are short, consider hiring freelance workers instead of full-time employees at first. Cut all the unnecessary expanses you could be having at the moment. If you’re lucky you probably caught the attention of an angel investor or some venture capitalist that wishes to invest in your business. If not, then you need to make a risky move if you’re still short on cash. Either get a loan from a bank or from some other source, just be careful not to bite off more than you can chew and you’ll do fine.
In conclusion, sit down and think things through before committing to any kind of expansion. If you determine that the time is ripe, then by all means start planning your strategy and make sure you stay organised and well on track. Keep the cash flowing and take great care on whom you employ at this crucial period, cherry pick the best and dump the rest.