THERE are many situations where a business would benefit from expansion and it is important to weigh up both the advantages and disadvantages of growing your business.
Research is key in making an informed decision. Study the demand for your product, your potential market place, your competitors and your customer base as well as the impact expansion may have on your internal processes.
You should only consider expanding if your business is healthy. If it is not profitable, expanding may cause bigger problems which have the potential to be disastrous.
Think about why you would like to expand, and whether doing so would result in cost advantages for your business. Expansion often means using more resources and employing more staff. Would the increased business make sufficient profits to comfortably bear the weight of these extra costs?
Then there is the issue of financing your expansion. Funding remains a challenging area for small businesses. As well as the traditional bank loan consider invoice factoring, overdraft facilities or leasing equipment to provide more funds for expansion.
You could also consider investment finance, which would mean that an investor would share some of your business risk, although if you are unwilling to relinquish some ownership of the business this option will not be suitable.
If you do decide to apply for a business loan, remember to make sure your business plan is water tight before presenting your application to the bank.
Growing a business is challenging and it is important to consider the risks associated with expansion. It is important to make sure you feel capable of taking on such obstacles.
If all of these issues have been duly considered, the benefits of business expansion can be numerous and extremely rewarding.