The prospect of expanding your business beyond a small operation into a larger entity is something that stirs at the heart of many business owners. But it requires careful planning to avoid going pear-shaped, explains John Corias.
Any small business owner who’s had a taste of success will have contemplated ramping up their business in one way or another. Rapid business growth can be an exciting, but growing too rapidly can also be dangerous and could even lead to the demise of your business. With that in mind lets take a look at a few the key areas that must be carefully considered and planned for before expansion plans are put in place.
Does your physical workspace have the room for your business to grow? No matter what business you run, you will have a physical workspace, anything from a home office to a large warehouse. Can you grow where you are, or do you need to expand upon your location? A move to new premises opens up a can of worms in terms of cancelling leases, finding new premises in a suitable location and the associated costs. Legal fees and moving expenses can be a substantial drain on cash resources and time taken away from actually running the business. Moving may be a necessity before expansion, but can you afford the short-term drain on time and cash resources?
When it comes to staffing, small businesses often rely on current staff to play a large role in the expansion. However, business owners must be careful not to put undue stresses and pressure on current staff and risk burnout or having critical errors made due to long hours. Keeping staff involved in the expansion and growth of a business gives them a sense of ownership and creates a great team that will work together and feed off the growth to inspire further growth. Bringing on new staff must be managed carefully - time must be taken to ensure they are fully informed of the plans you have. Don't neglect their training in your haste to expand, otherwise you risk losing good staff or damaging relations with existing customers.
Often the thrill of the chase for new business will see existing clients feeling neglected or unloved. Dedicating a team or particular employee to manage those existing customers and clients will help to prevent them from wandering away from your business. If customers and clients are accustomed to receiving personal service from you as the business owner, make sure you still maintain regular contact or assign a delegate to liaise with those customers on your behalf, always with the understanding that you are there to back them up. Perhaps even schedule a time to explain to current clients your expansion plans so they are more understanding of the limitations on your time.
Marketing will always be essential when expanding a business. Getting the message of your product or service out to the marketplace in a consistent and timely manner is key. Stay true to what's worked in the past and tailor differentiated marketing plans based on your service or product offerings. One generic plan may not be suitable if your businesses offerings are diverse.
Often administration of a business is seen as a necessary evil, but ensuring that policies and procedures are in place to manage new business is essential. Flying by the seat of your pants may have worked as a solo entrepreneur, but the time for acting that way is over.
Most small businesses don't have a dedicated IT department and fixing IT-related issues often falls to a key staff member who becomes a pseudo IT department and neglects their normal duties. Create an IT budget to manage the implementation of new hardware and software that can more than adequately handle business growth.
Expanding your business should be an exciting and fruitful time. Ensuring that all aspects of the business are adequately placed to handle the expansion will allow you to grow with as few headaches as possible. There will always be issues that arise, but keeping a strong united team capable of adhering to key business policies while keeping new customers happy will keep the dramas to a minimum and allow you to focus on the bigger picture – a viable, healthy business capable of surviving the toughest of storms.
John Corias is a Senior Partner at m.a.s accountants.
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