Many small business owners have the vision of expanding their reach at some point. However, small business expansion can be tough, and needs to be approached the right way to mitigate any possible shortfalls.
One of the main dangers with small business expansion is that sometimes business owners can approach it too quickly or in an uncontrolled way. This can negatively impact cash flow and customer satisfaction before anything else.
While there are rules to follow when expanding a business, the main thing to remember is it’s about what not to do, rather than what to do. Small business expansion doesn’t need to be difficult.
Plan your expansion. A solid plan needs to be drawn up, including these main points:
- Costs and cash-flow required.
- Projected future demand and demand for product/services
- Competitor activity or any threats.
- What can be achieved/a goal.
- How much growth is required to meet demand?
Ensure that a comprehensive software program is chosen to manage day-to-day business operations. Standard operating procedures should be written up and managed with SOP software to ensure continuity if operating from multiple locations. If you’re operating from a single site, SOP software is just as important as it will allow you to develop a streamlined process of managing your employees.
Don’t over expand too fast.
Over expansion is one of the biggest dangers during a growth phase. It’s easy for small business owners to over commit and expand beyond the needs and financial capacity of a business. Expansion should be planned through different phases, while having a comprehensive projection of demand.
Keep customers informed.
Expansion can be severely disruptive to day-to-day business. Keeping customers informed of an expansion is important so they know what to expect and when to expect it. Tell them what they are going to have to deal with, and how it will benefit them in the future.
Manage a schedule for expansion.
Business generally skip this stage and just take it as it comes. It’s important to plan a project management schedule which includes a review structure, identifies procedures and builds in timing and financial contingencies.
Finally, ensure that you are announcing the completion of your small business expansion once you have completed a phase, so customers know that there are new offerings and products available from your business, in different locations.