So, your business is doing well and making money. Workers are happy in their jobs, sales are up and you are meeting demand.
But what next? Should you sit back and relax – or should you be taking steps to expand and grow the business?
Spotting the right time to grow your business is a challenge. Too early and you may end up out of pocket, too late and you may miss the boat, with potential customers sailing off elsewhere!
Businesses have to be ready to grow, but scaling properly requires careful planning and execution to succeed.
So how do you know the time is right? There are signs that all business owners can watch out for that show when it’s time to take that next step. Here are nine signs we’ve identified to help your decision.
1 You’re turning down potential business opportunities due to lack of capacity.
You have the extra customers and potential sales, but you haven’t got the staff or the resources to meet that demand. This sounds like a wonderful position to be in, but it can also be a tricky one to manage. If you turn potential customers away, they’ll look elsewhere and are unlikely to come back. Worse still they may remember you as a business that couldn’t rise to a challenge. Building a customer base is essential to safeguard the future of a business and it’s important to nurture that base as well as increasing your network. If you are attracting interest from potential new clients, it is a huge sign that you should be looking to put plans in place to make sure you can grow to meet that rise in demand.
2 You’re surpassing any goals you set.
If you consistently attain and surpass your goals, then it may be time to set bigger ones! Now is the perfect time to rethink your business and begin to scale up. If goals are no longer a challenge for you, they should be re-evaluated – after all where’s the fun in meeting your targets every time? Use statistics and analyse trends to determine what your future goals should be. Challenge your business to be the best that it can be and put the resources in place to help you get there.
3 You have a strong cash flow and repeatable sales.
Profitability alone isn’t enough, but these elements combined are both clear indications of prosperity and suggest that it is time to think about scaling your business. A healthy client base and repeatable sales both indicate it is safe to think about growth. Growth often involves investment, so you need to be absolutely sure you have a secure financial base that will allow for your business to sprout. Make sure you have a strong and realistic financial plan in place to ensure you can deal with any unexpected expenses.
4 You have a proven concept and a reliable infrastructure.
You a product or service that’s in demand, but do you have the staff and resources to keep up the supply needed? Adequate staffing is essential – a business is only as good as its people and the workforce is the foundation that success is built on. Employees need to be reliable and loyal as well as talented in their jobs. Make sure you have full confidence in your team members and their commitment before embarking on expansion. You must also have the right equipment and technology to make sure your systems run smoothly and efficiently.
5 You have a clear plan.
You should only begin to scale up when you are ready and everything is in place. You might be doing well, but why add unnecessary risk? Make sure that any risks you are taking are minimised and carefully thought out, with contingency plans in place. Like when first embarking on launching a business, a clear and robust business plan is essential with realistic financial forecasting. Failing to have this in place will set you up for problems in the long run.
6 You have strong leads.
Your sales funnel is essential in maintaining business success. This all starts with strong leads that can progress to sales. If you are confident that you have a consistent flow of strong leads coming into the business and that conversion prospects are promising, then scaling up should be a no brainer. If you have been inundated with leads recently, but feel you may have operational issues if all of them turn into confirmed sales, it might be time to think about scaling up.
7 Demand is exceeding capacity.
If your demand is greater than you can cope with, it is tempting to immediately consider scaling up to meet it. You may want to rush in to take on more people or invest in more equipment. There are a couple of cautionary notes to consider here, however. Make sure any investment in these areas is carefully thought through and that you can afford it in both the short and long term. Also, make sure the increase in demand is not temporary or as the result of external factors, such as a heatwave or a cold spell. If demand could tail off again after a short time, it may not be the time to scale.
8 You have money to invest.
If you have begun to build a surplus of profit in the business, or feel a business loan is manageable within your current cash flow limits, this could be an ideal time to consider how you could grow, branch out or make significant improvements to the business that will allow for this in the near future. It is important to be aware, however, that you may not see the money you invest pay dividends for some time, so whilst having a long term plan in place is great, it’s also important to make sure you have enough to cover you in the meantime.
9 You can delegate with confidence.
If you are seriously looking at expansion, it may not be realistic to think that you will retain your current level of control. You can’t keep on top of everything yourself and you may need to hand over sections of your business to others. If you have complete confidence in your infrastructure and your team and you trust your deputies completely, then go for it.
At Get Smart Accountants we work with our clients to drive growth and help them achieve their dreams.
If you’d like some advice or support to get your business moving in the right direction, then we’d love to hear from you.
Call Emma or Paul on 01902 212937