Many entrepreneurs have ambitions to grow their businesses. It’s no secret that new business failure rates are high, but there are ways to beat the odds. Rigorous planning can help to minimize risks and maximize the chances of success when expanding. If you are on a mission to hit new targets and scale up, here are some essential questions to ask before you take the plunge.
Is there a demand?
One of the most crucial boxes to cross when growing your business is to determine whether or not there is a demand for your products or services. If you run a restaurant and you never have any tables free and there is a waiting list, or you have an eCommerce website and you are inundated with orders, this is a positive sign. If sales have stalled, you have surplus stock you can’t shift, or you’re struggling to attract customers or diners, it may be wise to hold off expanding for now. If you spend more money, and the demand isn’t there, you could end up with debts that you can’t pay off.
Do you have the funds to take the next step?
Growing a business requires investment. Whether you are aiming to target new markets, you are opening a new branch or store, or you want to develop new products, you need to ensure that you have the funds available. Cost out every aspect of your growth plan and explore funding channels. Conduct extensive research, weigh up the pros and cons of different funding streams and analyze risks. It is a good idea to consult financial experts with expertise in your industry for advice.
Are you familiar with the logistics involved in expanding the business?
Expanding a company is never as simple as renting new premises or putting new products on shelves or landing pages. There may be significant logistical challenges. Take the example of selling to customers in different countries. To achieve this goal and widen your client base, you will need to figure out how you’re going to ship products, market your business to a new audience and ensure you adhere to rules and regulations related to exports and sales. You may need to consider finding a customs brokerage, hiring new distributors and delivery services and working with experts, such as marketing executives, in different countries. Research your options, get quotes and look for firms that have an excellent track record.
Are you generating profits?
It can be challenging to balance the books when you run a business, let alone generate profits. If you are eager to try and grow your company, it’s critical to analyze your accounts before you decide whether to take the next step. If you are struggling to make a profit, or you already have substantial debts, think carefully about borrowing more money and take calculated risks. If your sales are soaring and you are confident you would be making profits in the near future, it may make financial sense to proceed.
Most business owners have ambitions to grow their company, but expansion isn’t always easy or successful. If you have plans to develop your business in the coming months, ask yourself these questions first.