Your business is growing and you’re looking to expand. Here’s how exercise a bit of caution, because timing it right is your greatest asset.
By Craig Falck for Africa Report
Photograph: © Yuri Arcurs | Dreamstime.com
Expanding your business is not something that can be taken lightly. It’s a massive step for any business, and calculations need to be made and research done to ensure that everything is in place. Here’s how to decide when and where to grow your business.
First things first: are you in a financial position to grow? If you want to know this, don’t look at your bank account. You need to consult your financial officer and advisor. They will look at the various formulas and see whether your cash flow is enough to support expansion, whether you have enough assets to support the demand – basically; whether you’re financially sound to cover all of the costs incurred when increasing your business size. If they give you the thumbs up, it’s off to the drawing board to plan your expansion. If it’s a no-go, it’s also off to the drawing board, but this time to lay out plans to get to the point where you can grow.
If you’re in the position to expand, you need to decide what kind of expansion you want to do. Do you want to franchise your business? Do you want to simply build bigger premises? Do you want to move from one city to the next? There are many other questions that you will have to ask yourself, and it’s important that you look at your company’s goals and which direction they’re pointing you in. It’s also important in this situation to conduct research, and it will be different for whatever expansion plan you opt for. You need to look at the costs of building, the costs of moving, the costs of moving equipment, the market for your business in the new area or areas, the demographics of the neighbourhoods. Answers to these questions will have an impact on your decision.
The most important thing to remember here is that while intuition is a great tool, it can send you headfirst into trouble. While it is your business and you’re the boss and who makes the decisions, there are a lot of people depending on you and who you need to think of. If you’ve built up your business over the years and you’ve assembled a terrific team who you know you can rely on to do the job without you constantly checking up on, you will be letting them down tremendously if you just pack up shop and disappear. Likewise, replacing these people will be incredibly difficult and you could find yourself with a team who simply cannot perform to your standard and what you’re accustomed to. As soon as this happens, your customers will notice and they will find someone who will get the job done properly.
Expanding a business is a big job, and you need to think very carefully about doing it. If you take everything that you need to into consideration and you’re confident of the growth, go for it. Just make sure that you have a back-up plan. Likewise, if you’re not 100 percent sure, don’t leave things to chance… it has a nasty habit of making a fool out of people.
