So your business had a successful year, and there is a strong demand for your product and services. You have good working capital in the bank, and you have a healthy workforce. So, the question is, should you expand your company. To make this decision, you should review three key points, which are imperative to your choice. These points are costs, sustainability, and human resources.
Expansion Costs
There many costs associated with expanding your business and they can be massive. There are costs if you need to grow your offices or production space. There is a cost for new employees, and this cost will increase overhead. A venture capitalist is an ideal route to getting the funding needed for expansion.
With a venture capitalist, your products will have to have a successful and lengthy track record. You can implement cost-cutting measures such as using third parties labor instead of employees in certain areas, cutting back on expenses, and reducing unsold inventory.
Getting a bank loan is the most popular option in getting the funds you need. There are financing options out there that have the business acquisition loan. Your chance of getting a low-interest loan is good if your company is a profitable company with minimal debt, reasonable risks, and excellent management.
Market Sustainability
Can the market sustain more of your product? The market can be tricky. Is there a real demand for your product. Is the demand you are seeing real and is it sustainable? You should study and monitor the market carefully and often. Market studies and online polls can be used to monitor and analyze the market.
Online polls and surveys are very valuable, and they make the customer feel you value their opinion, and they are especially useful for new products and services. An influential work culture should be created to attract talented employees who are motivated to work. In a culture of growth, your employees should feel free to express their ideas.
You should make sure your employees feel that they are contributing and they have a similar vision as you do. Employee contributions are essential, and it can lead to a sense of commitment. You want to avoid employee stagnation.
Human Resources
Do you have the human resources to expand your business? You must hire new employees with growth in mind. A small staff cannot handle the work involved in the expansion. As is commonly known, it will be challenging to fill new and key positions.
Your primary focus should be finding new talent. Utilizing a third party company can help provide staffing you need. Your employees should be motivated to work, and they should help you brainstorm new ideas as well as perform their job responsibilities.
Know Your Limitations
It is important that you know your limitations. It would help if you planned long term, short term and strategically. New products and a new location require a considerable amount of money and many resources, and there are huge risks. You should create a long term plan. You do not want to grow too quickly and deplete your funds, nor do you want to grow too slowly and miss out on opportunities.
