There’s always a lot of talk about “growth” in the business world among small, medium, and large companies. But growth in and of itself isn’t always the best goal. There are other ways to talk about and define success that don’t involve growth, per se. There are also other ways to increase satisfaction and profitability besides expansion.
But many brands—especially smaller ones—look to expansion as a seemingly natural response to improving metrics. However, without due diligence and proper planning, this is often a crippling or even fatal mistake.
Small business operators can easily become overwhelmed by increased demands, and quality, consistency, and service can suffer. Also, sometimes factors that contribute to success in one place don’t exist in others. And sometimes, owners get caught up in diverting money or other resources from one location or part of the budget to another, which can drag down what was once a thriving enterprise.
Plenty of reasons account for why businesses frequently stagger or fail after growing, but all that’s a bit beyond the scope of this piece. The takeaway here is that you can’t jump too hastily into expansion just because you’re on an upward trend.
Mull over the questions below thoroughly to help decide if the time is right to pursue and expansion.
Things to Consider Before Expansion
- What do you stand to gain from growing in the ways you’re thinking about?
- Is there a significant downside or lost opportunity if you don’t expand?
- Are you sure there aren’t practical ways to do more with what you currently have?
- Are you struggling to meet demand/operational needs with what you currently have?
- Can you and your family personally handle increased stress and time demands?
- Have you done the research and found enough consumer demand to sustain growth?
- Have you found the right location if you’re expanding physically?
- Does your brand scale well enough that new profits will more than cover new overhead?
- How will you maintain service and quality for current customers or clients?
- Do you have enough staff on hand or the ability to hire more and get them trained?
- Do you have trusted people to delegate new managerial duties to?
- Who will help fill your existing role while you focus on the expansion?
- Are you financially able to invest without risking your existing business?
- Do you have cash reserves to cover you until your cash flow increases?
- Did you write out a detailed, actionable plan for making this expansion work?
- Can your current technology, systems, and processes handle the expansion?
- How will you address any existing shortcomings in these areas?
- Do you have the communication capabilities to keep up exceptional customer service?
- Will existing customers be patient and loyal while you work through growing pains?
- Will you need additional office space?
- How will your sales and marketing needs change?
- How will oversight of new avenues or locations work to ensure consistency with your brand?
- Will you need additional licenses? Will it be a long and/or expensive process?
- Are you taking on new competitors by vying for a new market segment?
- Do you have a unique selling proposition to beat these new competitors?