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4 Clear-Cut Clues It’s Time to Expand Your Business

Signs It's Time to Expand Your Business

Let’s cut to the chase. If you’re reading an article about when to “expand your business,” there’s a good chance you’re ready to take your business to the next stage in its evolution.

As you know, timing is everything. Growth will always be a risky proposition—scale too early and you could jeopardize your business. However, expand at the prime moment and you’ll position your business for major future success.

If you still have your doubts, you can look for a few telltale signs that’ll indicate it’s expansion time. You’ve probably already noticed a few of these clues (that’s why you’re here, isn’t it?), but others will require you to do some research into the state of your business. These clues will make your decision to expand—or not expand—less of a gamble and more of an informed strategic decision.

  1. You’re Drowning in Business

This sign can manifest itself in a variety of ways across different industries: customers lining up out the door, a lack of bandwidth to accept new business, late hours at the office, depleted stock and inventory, etc..

If your business can’t meet demand, that’s a clear sign it’s time to grow. But, before you press the green light on expansion, make sure you dig a little deeper into the details. Are you just experiencing a one-off crazy-good month? Does your business follow a seasonal cycle?

Answers to questions like these can help you determine if your business is ready to expand and how. If business is booming in the summer and lulling in the winter, consider hiring temporary, freelance, or part-time help when needed. If you’ve hit a recent spike in sales, don’t rush off and purchase additional real estate or bulk up on inventory before you’ve determined there’s sustained demand.

  1. A Golden Opportunity Arises—And You Can’t Say “No”

When the perfect opportunity presents itself, sometimes the best business decision is to seize it before it passes by, even if you don’t feel like you’re ready. Maybe a piece of expensive equipment goes on sale, an opportunity to grab a second location surfaces, or you have the chance to make the ideal hire—sometimes you just can’t (or shouldn’t) say “no.”

Be adaptable and open to change. When you find yourself in these situations, you may be forced to grow your business faster than you’re comfortable with. Rarely will the perfect opportunity arise when you’re content and ready.

You’ll need to take a step back, examine your business circumstances, and determine if expanding is worth the risk. If it’s right, get the financing you need and go after it. If it’s not, stay on your toes and keep your eyes open for future opportunities.

  1. You’ve Built A Sufficient Cash Cushion

It’s no secret that staying on top of your budget is critical to your small business’s success, but once you have enough cash sitting in your emergency fund, it’s time to put the excess to good use: expansion.

Think of ways you could use that money to grow your business. You could expand your inventory, build your team, invest in advertising, or acquire a competitor—the opportunities keep going and going.

With any business development, you’ll go through a ramp-up period where you won’t see any return on your investment, so make sure you are conservative with your financial projections and have sufficient cash on hand to cover any unexpected situations. Don’t forget that your savings account doesn’t do your business much good (except for in times of need), so think of all the ways to get the extra cash working for you and building your business’s future.

  1. You’re Ready (and Excited) to Delegate

For entrepreneurs, especially first-time small business owners, delegation doesn’t come easy. They’re heavily invested in the success of their business and often don’t trust others enough to handle important (and sometimes even trivial) responsibilities.

If that’s the case for your business, you’re likely not ready for expansion. However, if you’ve begun delegating and are anxious about the prospect of passing on more duties, then you may be in a good position for growth.

Your business needs to always remain in a position where it can carry on without you. If your business’s survival is dependent on you putting in the hours, weeks, and years, then it will be in a constant state of vulnerability. Growing the business in this environment often leads to burnout and eventual failure. So, before you expand, make sure you’re ready to delegate and empower others.

If you’re observing any of these 4 signs with your company, feel confident in your decision to expand your business. And, if you’re not seeing these signs, prepare for the day when you do so that you can move forward intentionally and strategically.

Author Bio

Jesse Sumrak is a Social Media Manager for SendGrid, a leading digital communication platform. He’s created and managed content for startups, growth-stage companies, and publicly-traded businesses. Jesse has spent almost a decade writing about small business and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped startup. When he’s not dabbling in digital marketing, you’ll find him ultrarunning in the Rocky Mountains of Colorado. Jesse studied Public Relations at Brigham Young University.