Growth is necessary to remain competitive and stay relevant as a business. However, while expansion can be an exciting time, it can also be daunting, especially if you grow too quickly and don’t lay out a strategic plan. 

If you want your growth to be successful, you’ve got to know when it’s the right time and how to go about it by making informed decisions that ensure viability and the long-term health of your company. 

This article will provide a guide for expansion, offering insights into knowing when it’s time to expand as well as key considerations for your growth strategy to help propel your business forward.

Signs it Might Be Time to Expand Your Business

Expanding too quickly when your business isn’t ready can backfire. When this happens, it puts a strain on resources, which can compromise the quality of products and services and weaken financial stability. As such, it’s crucial to carefully evaluate your situation to determine if you are ready to take on any growth. 

These are some of the most common signs that may indicate growth readiness:

• You have a loyal customer following; 
• Demand for your products or services is steadily rising;
• You’ve outgrown your space;
• You have more business than you can handle;
• You are getting too comfortable and might be passing up opportunities;
• You feel out of touch with the rest of your industry and competitors, because they are ahead.

You can also look at the future forecast for your industry. If data shows your market is expected to experience growth, then this might indicate that it’s a good time for you to consider expanding.

Growth Strategy Considerations

An effective and successful growth strategy takes time and careful planning. One wrong move could end up setting you back. As excited as you might be to take your business to the next level, it’s important to go slow and carefully evaluate every decision you make along the way to avoid any pitfalls. 

1. Set Appropriate Goals

It’s important to clearly outline your goals for growth, and this begins with a thorough evaluation of your business’s current situation. Even if the above-listed signs are true for you, it’s still important to carefully evaluate your performance and resources to ensure you are in a good position to start expanding. 

Identify your strengths and weaknesses as well as any potential threats or risks you might face by taking on an expansion. You can then create an action plan. 

Some examples of things you might want in your goals and action plan include:

• Adding new products or services;
• Growing your marketing team;
• Expanding to new locations;
• Growing your sales revenue;
• Growing your customer base to include new audiences or new target markets.

Creating this plan will enable you to manage and track your progress along the way to ensure the decisions you are making are in line with your end goals.

2. Conduct Market Research

Conducting market research will give you key insights into your target audience so you can better position your company for growth. For example, if one of your goals is to add new products or services, market research can help you identify what products or services would be the most well-received by your audience.

Some questions to ask when you are conducting this research can include:

• What are the demographics of the consumers who buy my product?
• What are their preferences or interests?
• What are their pain points or what problems do they have that I can help them solve with my products or services? 
• How can I connect more with my target audience to create better customer experiences?

Market research also includes looking into general market trends for your industry, such as market size, demand, and growth trends. This can help you better understand how your market is currently functioning and if there is going to be continued or increased demand for the things you sell in the future. 

3. Grow Your Team With the Right People

Many people think the key to success is making more money when in truth, it’s about hiring the right people to help you achieve your goals. Having a solid team of employees with the right skills can make a huge difference in how your business operates and how successful you are at delivering quality products and services that bring in more revenue. 

When you start planning your expansion, hiring the right people should be high on your list of things to do. You not only want to hire people who have the skills you need, but you also want people who see your growth vision, are in alignment with your goals, and will be excited and dedicated to helping you achieve success. 

4. Find the Right Location

If your expansion goals include opening a second location, it’s important to take your time finding the right spot. A new brick-and-mortar location can quickly eat up a lot of your funds. So it’s a good idea to take time to shop around to make sure you are finding the ideal spot that will help you increase your revenue. 

If you want to test out a new location without breaking the bank, here are a few tips:

• Try opening a temporary pop-up to see what business would be like in the location you have your sights on. 
• Collaborate with another company and try co-retailing to spread out the costs.
• Consider a business-on-wheels, like a retail truck so you can easily try out multiple different locations. 

If you don’t think you have the funds for a permanent second location, you could always put your focus on expanding your business online. eCommerce businesses are booming and this is a great way to reach new audiences without having to open a second physical location.

5. Measure and Monitor Your Progress

Finally, as previously mentioned, tracking and measuring your progress is key to a successful growth strategy. Ideally, your business should already be using key performance metrics before you expand, but if you haven’t, now is the time to start. 

Key performance metrics offer you insight into crucial areas of your business that could affect your ability to sustain new growth, such as employee turnover rate, revenue growth, inventory turnover, and customer acquisition cost.

You can also use metrics to track your progress once you start expanding, such as new sales, new customer acquisitions, ROI, and customer feedback. Looking at these numbers can help you identify if what you are doing is working or if you might need to adapt and make some changes to help you get back on track with your growth goals. 

In Summary

Expanding a business comes with its risks, but those risks are often worth it if you are well-positioned for growth. As long as you carefully evaluate the state of your business and have the resources and capital you need, as well as the right tools and the right team to help you achieve your goals, then there is no reason why your expansion won’t be a success.

Featured image by Alena Darmel