Expansion can mean a lot of different things for a small business. Most people think of opening another location, or moving into a bigger one, but something as simple as hiring your first employee or expanding your marketing scope also count as expansion. With that in mind, and knowing the investment required, figuring out the best time to expand is tricky. But, if you know what signs to look for, that decision becomes much easier to make.
You’re doing more business than you can handle
I know — this one seems pretty obvious. You might think, “of course I’d expand when I’m doing a lot of business.” But I’m also a small business owner, and I know how wary we can be. We freeze during the good times because we don’t want to alter a working formula; this fits into the whole “if it isn’t broke, don’t fix it” mantra.
But what separates the good entrepreneurs from the great is a willingness to take risks.
Good, consistent business is great for experimenting with expansion because it gives you a benchmark to compare post-expansion results. Plus, you don’t want to miss out on the chance to capitalize on any potential business you simply can’t keep up with. So if business is brisk, resist the urge to maintain the status quo and start thinking expansion.
Customers are seeking you out
Marketing exists for a reason — you want to reach as many potential customers as you possibly can. And when a lot of people are walking through your door, you might instinctively attribute that to good marketing. But if you’re just assuming your customers found you through your ads, you might be missing a crucial sign that it‘s time to expand. Factors like reputation, market position, or a simple lack of competition could be driving people to find you, rather than the other way around. And if that’s the case, you should definitely consider expanding to capitalize on your growing market.
Getting new customers who sought you out is great; getting those customers on top of ones who you were able to reach after expanding is even better.
You have a hunch
I’ve always been a big proponent of listening to your gut. Entrepreneurs are unique in that we can identify needs and desires within a market that are not being met. That’s why we got into business in the first place. Don’t let your success overshadow that instinct. You need to stay hungry. That said, don’t go hog wild — pace yourself based on your current infrastructure and your future plans. But even if business is a little slow, or your current customer base isn’t as active, you should still pursue and explore your hunches. Test the waters; research that new location you think looks good; or start rolling out a new, limited product or service you believe might do well. Your instinct is one of your most useful tools.
Expansion assumes that a business has the elements for success in its current state. That means a good team — even if it’s a team of one — a solid customer base, and a product or service that’s selling. But, as I mentioned before, having all those elements can make an otherwise enterprising business owner wary of changing their formula. Always be on the lookout for signs that it’s time to expand. Knowing when the iron is hot enough to strike is crucial to staving off stagnation.