Expansion is a significant sign of business growth. Once business owner decides to expand, it means the firm receives overwhelming cash flow. Business expansion enables the enterprise to serve or cater to a larger number of consumers. Thus, the investment might come back twice or multiple times letting the business grow even more and more.
Are you on a lookout to expand your business? It is pretty simple to think of the expansion itself and how it will bring more profit to the business. However, business expansion is a very challenging process; in fact, it is a complicated business procedure. It requires careful planning and long preparation. Expansion cannot be realized overnight. For a successful business expansion, there are do’s and don’ts to keep in mind. Here are the don’ts.
Never – Rush Any Decision
Creating a solid plan is vital when you think of expanding your business. It is nearly impossible to proceed with your expansion project without proper planning. Many entrepreneurs have gone through the expansion phase without even drawing a plan, which often result into failure. A roadmap towards the completion of your project serves as your guide. Without a plan, you might get lost along the way or might take a detour – making other changes that could be costly.
Questions you need to ask yourself during planning:
- How high is the demand for your product or service?
- Is it high enough to last for the next few years?
- How many additional people you might need?
- Will the expansion let you lead ahead your competitor?
These are just a few of the many questions you need to contemplate. If you cannot give a decent answer, then you are not ready to make an expansion.
Never – Over Expand
Yes, expanding brings more opportunities to the business. As a matter of fact, it takes the business enterprise to a higher level where new prospects await. One of the biggest pitfalls associated to executing this project is over expansion. Entrepreneurs are likely to get carried away in heat of the situation, wherein they tend to expand way beyond their financial capability and their needs.
Check out the business finance. Is it enough to cover the expenses needed? Obviously, company’s financial capacity should be the main basis of the expansion. Going beyond your monetary capacity is very risky. This might put your business in an uncertain situation that is hard to cope up. For instance, you keep on adding new things in your project even though it has already started. Chances are, you will spend more than the allotted budget without even knowing it. Stick with your budget to refrain from draining your business finance.
Never – Overlook your Current Customers
In any sort of business, customers are considered as the heart. Without the customers, business is nothing – it will never flourish no matter what entrepreneurs do. That is why, customers should never be neglected in the expansion project. Whatever sort of expansion you have in mind, never leave them hanging. Make an effort to inform your customers about the expansion of your business. If your business is moving into a bigger location, keep them posted. Display an announcement telling your customers where’s the new location and when will it happen. You do not want to lose your customers just because they did not know what is going on in your business.
After the completion of the expansion, it is vital to announce it to both existing customers and prospective customers. Think of a marketing strategy you can use to inform them concerning your new capacity and new product/service. Make use of the internet or print media.
Expansion is good for a business; but, it can also bring down a company if not properly done. Thus, it is critical to plan it very carefully. A successful expansion can lead to even bigger expansion plan.
Photo Credit: Flickr/Michael Kappel