Most entrepreneurs know humble beginnings, starting off with a good idea, within a relatively small space. Such businesses starting from the ground up, normally do so with just a few people or a single individual. Some businesses do not make it and others succeed, and hence would be worthy of expansion. When work volumes and income are good, it might be that as an entrepreneur, you would be exploring expansion. This may bring about excitement at the prospect of opening up in another location, attracting more customers or experimenting with new products and services. In this article, we shall be discussing the scenarios when it might be a good idea to expand.
Opportunities within the market are increasing
If the industry that your business operates in is faring well, you need to consider how you can capitalise and benefit from this growth. In this regard, entrepreneurs must keep tabs on changes in consumer behaviour, new developments in technology and other market forces that can help their businesses grow. This might bring to the fore the need for new or improved products, to meet evolving demands.
You may find that your current staff members are not coping with the demand. Not tending to customers within adequate timeframes brings about lost opportunities for revenue. In this same context, the existing base of clients may get frustrated due to longer timeframes for service delivery, leading to negative perceptions surrounding the business. In view of this material risk, expansion may be one of the only options.
A single stream of revenue
Businesses that survive throughout the longer term do not rely on a single source of revenue. If a business relies on just one channel, it can become problematic and cause future financial problems. If expansion means diversifying income sources, an entrepreneur might be better off taking the plunge.
Products and services are reaching maturity
All products and services go through life cycles. When these products and services are delivering steady growth, it might feel natural to continue on the same path. When however, products and services are reaching a stage of maturity, it might be essential to expand and offer new propositions. This decision and the work required should be undertaken before sales slow and interest in the business declines.
Many entrepreneurs and businesses find it difficult to identify at which stage further expansions should take place. This is due to the uncertainties normally associated with such steps forward.