As the business landscape continues to transform to keep up with an ever-changing world, your company may be ready for changes as well. There are many different ways a company can choose to take that leap of faith and grow.
From higher demand for your products to a growing industry, here are six signs your company is heading in the right direction and ready to expand.
You’re meeting your metrics
If your business is meeting its metrics, trust that the numbers won’t lie when it comes to expansion. Start with a common growth indicator like customer acquisition and determine if your company is generating enough business to grow while monitoring customer acquisition costs. Other financial metrics such as revenue growth rate and cash flow are also important.
Additionally, monitor human resources metrics including employee turnover, absenteeism, and employee engagement and satisfaction, as well as e-commerce metrics like the number of abandoned shopping carts, inventory turnover rates, and average order value.
You have a solid team of employees
Hiring—and sustaining—a team of employees you can rely on is the cornerstone of expansion for many business owners. If you have the right people already in place and can train them to take on new responsibilities once you’re ready to grow the company, you are already ahead of the game when it comes to a successful expansion.
Building a great team you can rely on will contribute to your business’s continued growth, as you can begin delegating tedious tasks and focusing on expanding your business and attracting more customers and clients.
You have enough capital
Determine if your business has enough capital by using a 13-week cash flow model. This can help you obtain a clear picture of where your finances currently stand while also determining if you could run out of money 13 weeks in the future. If the money is there, ask yourself if it is enough to take on new projects.
“Hiring—and sustaining—a team of employees you can rely on is the cornerstone of expansion for many business owners.”
Even if you check your budgets every day, there’s the possibility that unforeseen expenses could occur when expanding your business. Having enough cash on hand to cover potential losses as well as investments in other businesses will help your business expand.
Demand is higher than supply
If you have more requests for services and products than you can physically handle, it may be time to consider expanding. Failing to meet customer expectations can hurt your business while accommodating a higher demand will show you care about your customers. This will help you retain customers and clients rather than push them to seek business elsewhere.
As sales increase month after month, determine if the solution to the high demand is hiring more staff or an entirely new location to keep up with production. With expansion on the table, use this opportunity to survey your customers and get their feedback on your expansion plans.
Your industry is growing
The business world is often unpredictable in that popularity can rise in one sector and fizzle out in another. If your industry experiences a decline in interest or the market has grown, it may not be an opportune time to expand your business. Staying small is good for businesses in situations of stagnation or decline.
If your industry is experiencing a take-off and your business is one of the sole entities in your geographical area offering high-demand products or services, expanding your business would be a no-brainer. In this situation, expansion is almost always a guaranteed success.
You’ve defined your processes
Having well-defined, written processes in place will be helpful when expanding your business. When businesses are small, it can be easy to communicate visions, missions, and goals. As a company grows, those easily communicated items may begin to blur and become misconstrued if they are not written out for each employee. The more clear the company’s process is communicated, the better employees can stay on track toward their goals.
Story by Kaytlyn Mroz, CO, U.S. Chamber of Commerce
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.