One of the most important decisions a successful company needs to face is how to plan for expansion. It’s a nice problem to have, but you need to temper any excitement by making sure you’ve got all your ducks in a row (even if you don’t sell ducks). Just remember that you already put a lot of time, effort, and research into launching your company – doing a market survey, seeking expert advice, researching locations, setting up financing, etc. – and the same due diligence is imperative as you plan for the future.
You might be a sole proprietor running a home business and you’re ready to make your first hires and move to an office. Or you’re a solid, established shop thinking about adding a new location or even franchising. Or you’re a mid-sized business with an eye to expanding your territory. No matter your size or ambitions, here are a few tips to help you plan to expand.
Ensure You’re Ready to Grow
Expansion is not only a matter of business, it’s also a matter of stamina, time, and commitment. If you’ve got the fortitude – just like when you were starting out, you’ll be in for some long days – then you need to ensure your business is ready to grow. The Board of Trade of Metropolitan Montreal published an excellent online guide to help you measure your growth potential by looking at key statistics such as turnover, market share, profit, sales, and staff numbers. Before you embark on a new journey, you need to know exactly what kind of shape your business is in. Essentially, you need to develop an entire business plan with full SWOT analysis in order to successfully chart your new path. That takes time, will, and, most importantly, a healthy balance sheet.
Be Prepared to Spend
We know it’s true that you have to spend money to make money. But you have to spend it smartly. Consider consolidating all of your spending on a credit card that provides you with a monthly report on where your money is going. That way you can track car and travel, office supplies, equipment, dining, and entertainment, etc. – all of the spending categories that you can expect to surge as you execute your plans. Reward cards offer extra incentives, and you may find that you can save or possibly make money even as you spend it via perks such as travel discounts and cash backs. Meet with your bank’s credit advisor to help pick the best options. Most importantly, ensure that your credit limits are high enough to avoid any surprises as you go.
A Few Good People
It can be the hardest and also the most rewarding part of business – hiring and managing your team. But the people who come on board with you are key to your success, especially as you grow. Most smaller companies don’t need full-service HR or accounting departments, but you will certainly need guidance to ensure you are in compliance with regulations and labour laws. You will also need processes and policies for dealing with mundane stuff such as employee evaluations, grievances and plain old disagreements, not to mention employee benefits, bonuses, and perks. You don’t want to spend your valuable time on these details, but they are very important to your people. With outsourcing options and software solutions, this role can generally be handled by just one person in companies of 40 to 50 employees. Payroll is sometimes handled by the HR department, but it really belongs in accounting. Again, software solutions are easily accessible, or your bank may offer this service.
Making Your Move
Do you need a bigger space, either for an office, warehousing or manufacturing? This may be the most formidable part of your expansion plan, and will entail a lot of site visits, travel and meetings. Especially if you’re considering expanding to another part of a large city, or even another province. Remember that you need to choose the best location based on the needs of your business, your staff, and, if you’re a retailer, your customers. In this case, your decision will not be motivated primarily by price. Stick firmly to your business plan and make sure this major decision ticks all the right boxes.
If your business is growing, it’s a sign you’re doing something right – and feeling positive, even celebratory, is perfectly natural. But it’s also important to understand that growth is a disruptive force. A period of significant growth will impact every single aspect of your company – which is why you need to adopt a strategic mindset. Ask yourself, “Is my business ready to grow?” If so, the time to plan is now.