You created a business idea, drafted a business plan, and built a thriving enterprise from scratch. Congratulations, you’ve made it!
But what now? Just because your business is stable doesn’t mean the journey is over. Truth be told, you need to know when it’s time to grow your business just as much as you need to know when it’s time to save money and batten down the hatches for economic upheaval.
If you’re not sure what to look for, read on. We’ll break down five major signs that it’s time to consider expanding or scaling your business for even bigger profits.
Your Customers Demand More
One surefire sign that it’s time to expand your enterprise is your customers asking for more.
For instance, if your customers continually request new products or expansions to your services, who are you to deny them? It might be a good idea to draw up some business expansion plans so you can provide your customers with what they want or need at the earliest opportunity.
More broadly, if your customers demand more of your products in raw quantity, you may need to grow your business to keep up with demand. For example, if your customers would order 100 units of a specific product if you had it, it’s a no-brainer to order that much more product and expand your warehousing capabilities to meet that demand. Otherwise, it’s money left on the table!
Sales Have Hit a Plateau Due to Supply/Resources
As your business initially grows, your sales will grow with it. But over time, your sales may plateau, hitting an even level where growth is no longer apparent or even possible. If that plateau is because you’ve maxed out your supplies or resources, it’s time to expand.
Use sales targeting to determine the best way to expand your supplies and resources, and to know how many new products you should make. Through proper sales targeting, you can provide your customers with enough new products or services to get your sales numbers rising once again.
One key thing you’ll want to avoid as you grow your business is over-expansion. For example, if your sales forecasting says that your customers will likely want 1000 new products in the next week, don’t order 5000 new products; you’ll just waste money and have to hold those products until you eventually sell them.
Your Cash Flow is Consistently Steady
Furthermore, it might be time to grow your business if you look at your books and discover that your cash flow is not just steady; it’s been steady for some time. Consistent, steady cash flow tells you two key things:
- Your products are consistently popular
- Your customers are coming back for purchases again and again
The second element is especially important. Over time, if you don’t keep your customers coming back for repeat purchases, you’ll eventually run out of new customers for fresh revenue. If your business and its products are popular enough to have steady cash flow, it means you’ve hit the perfect equilibrium with your brand and your target market.
That said, it’s important to recession-proof your business at the same time. All businesses should have 3 to 6 months of expenses set aside before they consider opening up a new branch or expanding in any way. If your cash flow is steady, but you haven’t yet built up a suitable nest egg to insulate your brand against economic upheaval, consider putting off your expansion plans for a little while yet.
Your Industry Overall is Growing
Of course, you may also know that it’s time to grow your business not because of anything you see within your own enterprise but because of signs you notice in the industry beyond it.
If your market or industry is growing overall, it may be a good idea to join the wave of businesses expanding their capabilities and personnel rosters. For example, if you notice that people are buying not just your products but similar products in much greater numbers than before – and if social media is exploding with mentions of your brand and competitors – it could be an important sign that the industry is poised for an explosive expansion phase.
To that end, consider using recruitment methods to hire key employees for important positions, purchase more products, and open up as many new branches or locations as possible. If you can take advantage of expansion phases and don’t overreach, your business will be in a prime position to outcompete similar businesses, meaning your brand will have that much more control of its market when the proverbial dust settles.
You Feel Unchallenged
Last but not least, if you feel unchallenged in your current work environment, or if running your business has become boring, look inward and ask yourself: is it time to grow and move on to the next challenge?
Entrepreneurs like you often feel unchallenged once their businesses reach profitability or stability. That’s not necessarily a bad thing. That itch you have to tackle ever-greater challenges is one reason why you are so successful.
So if you feel unchallenged, consider not jumping ship to a new enterprise. Instead, ask yourself what challenges you may encounter as you grow and expand your current venture. In many cases, growing a business to a bigger size and capturing more of its target market is much harder than leading a brand-new startup in a brand-new industry.
As you can see, there are lots of signs that may tell you that the perfect time to grow your business to new heights. Whether that means opening up a new store or several, hiring more employees, or expanding your product offerings, expanding your business will surely surprise and delight your customers and enable you to make more income than ever.