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When is the best time to expand your business

Chris Little, Commercial Director Coface ANZ
29 May 2018 2 minute readShare

Promoted by Coface Australia.

When is it time for a business to expand?

Growth is in the eye of the beholder. For some companies, growth means hiring new staff. For others, it means opening an office in a new country, while some envisage their growth as an entire new product or service.

The thing is, without clear business information reporting and a defined plan for this growth, directors can struggle to identify exactly when they need to expand.


When the market is ready

In most cases, business expansion means increasing supply of your product. New offices, more staff for higher output, opening up a branch in a new area – you're getting more eyes on your offering.


But without sufficient demand, this expansion will fall flat. That's where your business needs accurate, timely market research. Companies like IBISWorld provide in-depth analysis of each and every market sector, you can also contract firms to conduct research more tailored to your niche.

Market research is a necessity to ensure there is demand for your product.

Research from the Australian-Thai Chamber of Commerce show that 60 per cent of businesses expanding into Southeast Asia are doing so because of a growing consumer class.It's economics 101 – you shouldn't expand until there is demand.

When you have the resources



Without strong cash flow and working capital, businesses can struggle to expand. When money is tied up in late payments or bad debt, growth can be near-impossible. Dun & Bradstreet research from June 2017 notes that nearly 30 per cent of Australian businesses had a customer that became insolvent or was otherwise unable to pay what they owed in the last year.

Freeing up the money to ensure businesses can grow begins with strong credit terms.

Freeing up the money to ensure businesses can grow begins with strong credit terms and trade credit insurance. This proactive step can concrete ongoing cashflow, protecting the business from non-payment down the line.

When this results in solid cash flow forecasts and enough working capital to hire new staff or purchase new premises, it's time for a business to look at expanding.

When the dollar is in your favour

International expansion can often rest on the whims of the global economy. D&B's research indicated that 20.7 per cent of Australian businesses wanted the local dollar to strengthen, while 9.6 per cent wanted it to fall. 

A business' service will dictate the direction they require – especially when dealing with imports or exports. But if the Australian dollar is up against the currency of a targeted expansion country, it could be time to move. 

Every business has different growth goals, and indicators of when the time is right. To begin the process, speak to the team at Coface to ensure your trade credit guidelines are in the right place. 

When is the best time to expand your business
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Chris Little, Commercial Director Coface ANZ

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