Is it your dream as a business owner to expand your business? Now could be the right time to do exactly that. However, you need a plan that shows if the additional overhead will really be covered by additional revenues and still leave you with more profit.
Your goal might be to expand to two or three new shops or to add new services or just bring in more customers. Research and careful planning best insures your expansion will not only be a financial success but the best success possible. Don’t assume you already know the best direction to expand in. Talk to existing clients and customers to understand exactly where they think you business will grow the most.
Do Your Research
Begin with some additional marketing of your existing products and services. This will quickly tell you if there is additional demand out there that you aren’t currently servicing. If the marketing doesn’t bring in additional revenue, you’ll be out the one time marketing costs but you’ll save the on-going costs that an ill-timed expansion would have cost you.
Next, perform a careful survey of your current operations. Are they being fully used? Or can your initial expansion be a simple as a continuous marketing effort that brings in more business that you can handle without making major changes. Next, take at look at your competition, are they fully engaged or is the market saturated. If the market is saturated, this is not the right time to expand.
Build Your Expansion Plan
Look carefully into expanding over time. If you’re just bringing on three more employees, bring a new one on every three months for nine months. Same thing if you are opening a few new shops. Doing it over time enables you to build up revenue and profits in proportion to your timed expansion.
After you are sure that expanding will be profitable and that you are expanding in the right manner, it’s time to create a detailed project plan. You’re going to have financing requirements. These need to be a prominent part of your plan. Seldom is it a good idea to borrow all of the money at one time. With a detailed plan, you can forecast when and how much money you’ll need to finance the various stages of the plan. Doing it this way saves you financing costs.
However, don’t only plan your borrowing needs. Also forecast when you expect your profits to increase and by how much they will increase. A good project plan will keep your expansion on schedule and tell you if it meets your dream expectations.