Looking To Expand Your Business? Ask Yourself These 4 Questions First

When starting out in business, the planning stage is crucial. Whether it’s looking ahead to the next year or the next ten years, it is important to have a vision for the future. When certain targets have been achieved, it is then common to consider expansion.

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After all, most startup entrepreneurs are interested in company growth, so finding ways to expand the business is the sensible next step. However, this can bring about new challenges, so important questions need to be asked before making any hasty decisions. Therefore, consider the following as examples.

Why do you want to expand?

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An expansion needs to be a practical solution to a need. The customer base may have grown, so there may be a need for a bigger store or warehouse. You may have conducted research into the international market, so a global expansion may be practical and profitable. If now is the time to expand, then do so. On the other hand, there are those reasons to expand that don’t necessarily make sense. For example, the competition may be expanding, so you may want to do the same in fear of lagging behind.

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You may have made huge profits in your business, so you might think expanding your business is a good use of your money. In both cases, fine, but  remember our previous article,   Sometimes it better to weigh up the pros and cons and consider your reasoning before jumping headfirst into any business decision.

Can you afford to make the move?

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When profits are high, you may have the funds to move or expand your operations elsewhere. However, continuing our previous point, you need to consider the long-term viability of the expansion. Will you be able to manage the leasehold and maintenance of any extra property you buy? What are the insurance and utility bill costs? Will you need to take on any new staff to manage the new location? Costs will add up, and if you are running your business from two bases, it is wise to budget for both locations.

How will you manage the logistics?

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If you are expanding your current location, then logistically speaking, you should have little problem. If, on the other hand, you are moving to a new base of operations, setting up a second location, or moving overseas, you will face a logistical nightmare. This can be alleviated somewhat by hiring these folks,, but consider the options you have ahead of you. There is a lot of stress involved in moving, more so when your business operations are at stake.

Will you compromise your business?

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In theory, an expansion will be good for your business. However, if it eats into your profits, or you don’t take other markets into consideration, your business will suffer. Similarly, if you are spreading your current staff into separate locations or in new avenues where they don’t have the skills, you will face the consequences of the decision. Your customers rely on a good quality product and service from you, so will the expansion affect this? With these things in mind, focus again on your planning. There is some helpful advice here where expansion is concerned,, so do your research to protect your business and the people who benefit from it.

Final word

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There are many good reasons why you should expand your business, provided it is practical to do so. On the other hand, there are those reasons why you shouldn’t. We hope the questions we raised were helpful – think through them carefully as you plan for the future.

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