4 Factors To Consider When Expanding Your Business
If your new business has been in existence for fifteen years or more, it means you passed the test stage. Data suggests that new businesses often do not live beyond the first three to five years. However, the fifteenth year usually signals a time for expansion and rapid growth. While this is not necessarily cast in stone, it is advisable to be ready when the time approaches. Here are some considerations to make during your business expansion.
Reevaluate your vendors, suppliers, and partners
According to the Source Today website, the average business in the United States has at least three vendors and suppliers. The question now is, how dependent are you on these vendors and suppliers? Secondly, have they been up to the task for all the years you have been operating your business. These questions can become guidelines on whether these are entities you want to stick with during the next phase of your business.
Even when your vendors and suppliers have performed excellently, are they equipped to handle your expansion? Their ability to accommodate your growth and, more importantly, provide your business with needed goods are significant determinants. Unfortunately, if they cannot turn around larger orders, the best business decision may be to find another supplier.
In the same vein, you should reassess your original business partners. The truth is, as the business expands, you will automatically need entities with extensive influence to push your company further. Under ideal circumstances, business expansion influences growth for vendors, suppliers, and partners. But unfortunately, it not always the case.
Find reliable storage
Every business that reaches the expansion stage has to reconsider its storage space. It becomes even more critical when the internal storage unit becomes inadequate. Again, it becomes imperative to physically move bulk office items to another place in some other circumstances. What happens if you don’t have another business branch with ample space? You can use the best storage units experienced companies provide in this scenario.
Contrary to the general perception out there, storage issues are significant problems for businesses. This is one part of the business that entrepreneurs cannot compromise. Even those trying to cut corners with their storage needs hit a snag and always return to do the right thing. However, it is not advisable to wait until then to realize your storage needs.
Reconsider business financing options
Without a doubt, expanding your company will be expensive. It doesn’t come cheap under any circumstance. Whether you operate a small or large business, your establishment’s new and pressing needs move to the top of the list. So, what makes the expansion that costly? First, you need to procure new equipment, hire more people, find bigger business space, etc. All these costs add up to a significant sum. It explains why you need the time to rethink and reassess your current business financing options.
It is entirely different if you have the financial muscle to fund everything. If you don’t, it would be a good idea to talk with your bankers. Since you are already in business, you may be fortunate to have your existing bankers offer a convenient deal. On the other hand, the terrain might be different if it is your first time applying for a business loan. Either way, you need adequate financing to shore up your working capital. In addition, experienced entrepreneurs say it helps to discuss your expansion plans with your banker.
Make better hiring decisions
The business expansion also means going back to the job market to discover a new talent pool. Furthermore, the people you will be hiring must be considered based on their specializations and what they bring to the table. For example, if you begin business operations with a cashier handling your finances, you will need an honest accountant during the expansion phase. Although both are important, an accountant is a more specialized field that clarifies your financial transactions.
The more people you hire, the higher your expenses will be. With that said, though, you can adopt specific measures if you cannot spend much on new full-time hires. For example, you may want to consider part-time or contract workers. Better yet, take the time to reassess the roles of possible new hires. Can a simple technology upgrade perform these duties? If yes, the problem of paying new hires can rest for a while until it becomes critical.
To conclude, the business expansion stage is like a pendulum. It has its highs and lows. Therefore, try to give it your all to help the business pull through.