When starting a business, most entrepreneurs try to grow their enterprises as fast as they can. And they don’t always manage to make it work. Of course, it’s not a bad thing to have big dreams. If you don’t reach for the stars, why would you bother starting a business at all? But, running before you can walk is always going to lead to a fall. If you expand your business without a strategy, there’s every chance that your dreams will crumble. Even if you think it’s for the best, it’s possible that your business isn’t ready to grow.
Instead of blindly rushing for the finishing line, then, take a page out of the tortoise’s book. Slow and steady wins even the business race. So, before jumping into a multiple-premises business, ask yourself these questions about whether you’re ready.
Is the demand there?
First, consider whether there’s a significant enough demand. As much as you may want to invest in a new premises when your profits allow it, this could be a fast way to waste money. You’re still a small company at this stage. The increased capabilities of growth won’t help if the demand isn’t there. Those few loyal customers you’ve managed to scrape together will never make expansion worthwhile. If you’re turning away orders because you can’t keep up, by all means, expand. But, if you still only have a trickle of interest, it’s worth waiting. Instead, put your profits into an increased marketing campaign. Leave growth for later.
Are your operating systems strong enough?
The way you operate your business matters a great deal. You need to get a firm grasp on everything from employee management to your production processes. If you’re still having teething problems in this area, growth is never a good idea. As outlined in this article by Jozef Opdeweegh, businessman and long-term CEO, operations are essential if you’re running multiple facilities. This is the only way to keep your business running and offer a smooth customer experience. If you’re struggling to get on top of this in one facility, there’s no way you’ll manage with more. In that instance, focus on perfecting operations in the space you have. Only then should you even think about growth.
Can you afford it?
This may seem obvious, but it is worth asking whether you can even afford an expansion. Remember that having enough profit to buy more physical space isn’t going to cover you here. That’s because expansion comes complete with a whole number of other costs you need to consider. You’ll need to double the size of your team, hire delivery drivers to move between units, and even buy duplicates of heavy machinery. If you jump into an investment without thinking, you could find yourself with an empty space and no way to fill it. Don’t let that happen. Get a firm grasp on your company finances with the help of an accountant, and never invest until you have surplus profits to play with.