Let's Go! 866.628.0150

Our Blog

5 Things You Should Know Before Expanding Your Business

As your business continues to grow, it may be time to consider expanding into other locations, services or products. Before sinking time and resources into such a big move, you will need to consider how expansion will affect your current business practice. Below are 5 things you should consider before expanding your business.

expand business

What Do Your Models Look Like?

Before investing time and money in a hunch, you’ll want to set up models for how you can expect your expansion to go. Outline things like projected revenue, gross margins, operating expenses, and any other changes that will occur on your books. Don’t forget things like fixed assets, accounts payable, and debt incurred. Do this for at least three sets of expectations: low, assumed, and high levels of success. This way, you’ll be mentally prepared for the changes an expansion will bring.

What Will Your Valuation Look Like?

Similar to developing models, you’ll want to have an idea of your business’s potential valuation after the expansion as compared to what it is now. You may find that your current plan is more trouble than it’s worth. If so, rework your idea until you are confident in your assessments.

What Makes Your Expansion Unique?

Whether you’re adding a new product, expanding to a different market, or introducing a new location, you should know beforehand what will give your expansion the edge it needs to succeed. Research your market and analyze new strategies. Know the advantages and disadvantages to your plan so that your can anticipate your responses.

How Will You Use Your Resources?

An expansion is sure to use up a good amount of time and money. Know where those are both coming from, whether you are reallocating resources or taking on extra hours and debt. Likewise, plan for how your employees will be affected. Will they need additional training? Will you transfer them to a new location or change what is expected of them? Will you need to hire new employees to keep up with the new demand your expansion will bring about?

How Will You Market Your Expansion?

An expansion can be exciting, especially when it comes to acquiring new customers. You’ll want to be prepared for targeting a different market if you plan to do so and know what it entails. However, don’t forget about your existing customers. Is there potential for your expansion to confuse clients? You may need a separate strategy for customers who already hold expectations for your business.

Once you’ve developed answers for these 5 questions, you’ll be on your way to a successful expansion. IQ Total Source can help ease the stress of such a large change by providing everything you’ll need to keep your business running smoothly.

May 16, 2016 | Around the Office, General