5 Telltale Signs That You Need to Expand Your Small Business

Five Telltale Signs That Your Small Business is Ready to Expand: A Guide for Small Business Owners to Know if They are Ready to Scale

As small business owners, we all want our businesses to grow and prosper. However, growth poses many risks that can paralyze and prevent you from making that critical business decision.

If you’re thinking about expanding, how do you know that your business is ready? Are there reliable indicators that will help lower the risk of losing the company if you go ahead and take the giant leap?

Callum Laing runs a MBH Corporation*, a publicly listed group of small companies and speaks with close to a thousand business owners every year.

“The number one killer of small businesses is over expansion and subsequent cash squeeze, so you need to be clear on whether you are building a lifestyle business, or if you are aiming for something bigger.  Each comes with its own pro’s and cons and only you can decide” 

Still, whether you decide to scale your business or not, it is essential to give it careful thought. You need to take into account your finances, location, manpower, customers, and products and consider the possible opportunities your business expansion can provide.

So, if you want to know if you’re ready to finally scale your business, we have listed five telltale signs to help you.

Let’s dive right into it.

  1. Consistent Increase in Demand
  2. Current Business Goals are Met
  3. Rapid Industry Growth
  4. Significant Business Profit in the Last 3 Years
  5. Necessary Funds Available
  1. Consistent Increase in Demand

Plentiful and consistent product or service demand is a good indicator to determine if you’re ready to take the next step. 

Suppose your current business setup no longer meets customer demand. In that case, you can be confident that the need for your brand is genuine.

Being constantly overwhelmed with orders, having a hard time keeping up with the workload, and needing to have a bigger space are clear signs that your business needs an expansion.

  1. Current Business Goals Are Met

If you constantly meet your business goals and keep on achieving milestones after milestones, maybe it’s time to optimize your progress. 

You must consistently assess and evaluate your business goals. If you fall short, work on hitting your current targets before planning and expanding.

Have you managed to achieve or exceed your business goals? If so, you need to move forward and set bigger goals.

  1. Rapid Industry Growth

Look deeper and evaluate the current standing of your industry. Are forecasts and projections great? Or are there any policies or proposed regulations that can negatively impact the business climate? 

Is the industry too saturated, or are you one of the few who are scratching the surface of a potentially enormous market?

Suppose industry projections are good and you have less competition, or there is a large untapped market. In that case, scaling your business can be beneficial. 

  1. Significant Business Profit in the Last Three Years

A significant record of profitability in the past three years is solid proof of business success. The longer you’ve been gaining revenue, the higher the possibility that it will continue for the years to come.

In the past three years or more, business profitability has been an excellent indicator that it can sustain a business expansion.

  1.  Necessary Funds are Available

Business expansion, though seen as an excellent business investment, can undoubtedly be costly. After all, you need to have enough cash on hand to pay for new employees, add more raw materials, get a bigger business space, etc. 

So, ask yourself, do you have enough money in the bank to fund the additional expenses? If yes, then it’s an indication that it’s the best time to scale.

Final Thoughts

If you are a small business owner, now is the best time to check whether it is the right time or not to take your business to the next level. 

So, go ahead and evaluate your current business standing using these indicators. Don’t miss out on a great business opportunity simply because you didn’t know when to scale.

If you are a small business owner and would like to understand how you can capitalise on the public markets without the usual expenses, check out: https://www.mbhcorporation.com/business-owners

About April Q

EnterpriseZone Staff Writer

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