Grow and Expand Your Business with Profitable Planning Strategies
Many businesses rush to grow and expand however it must be remembered that not all business growth is created equally. When you grow your business too quickly, you are putting a strain on other resources and expanding rapidly might put your business at risk.
If you are expanding your business, there are many factors that you will want to consider before expansion. Good planning makes a business expansion successful.
Expand rapidly
When you grow your business and expand rapidly, you could be putting your business in harm’s way. Rapid expansion can bring on problems that you might not expect, such as cash shortages, a strain on manufacturing capacity, and a strain on your team members, and those are just a few.
Be sure to read the list of factors you will want to consider before you expand rapidly. To grow and expand your business takes a plan to help it succeed.
Fast growth
Many business owners believe that fast growth is always a good thing. They think fast growth will bring in more money and don’t consider the proper planning that fast growth needs. You need to consider from all angles what could go wrong with fast growth in a company.
Fast growth can also cause a business to go bankrupt. You will want to avoid that and ensure you are prepared while growing.
For example, when Oprah had her talk show on the air, she would endorse various products. This resulted in the coined term “The Oprah Effect.” That is when sales would hit all-time highs for featured businesses, and there were stories of businesses that couldn’t keep up with the demand and ultimately shuttered due to poor planning.
Business secrets
The best-kept business secret to ensure that your company can keep up with fast growth is to create a financial plan for the following months to anticipate the business’s needs during the rapid growth phase. It is proactive to plan out this phase to avoid and mitigate any risks that come with fast growth.
Things you’ll want to consider when facing fast growth in your business:
1. Can manufacturing keep up
Additional pressure on the capacity of your manufacturing is real pressure. You must know if they can handle the extra volume without compromising quality. When you commit to orders you can’t fill, you will have unhappy customers who will go elsewhere.
2. Do you need to expand your team?
With added work comes added pressure on your existing team. Will you need to staff additional positions, and will you be able to afford to pay them? You need to be careful not to overwork your existing team as if the workload becomes unbearable, they will become unhappy and possibly leave your company.
3. Office expansion
Are your existing facilities large enough to house growth, or will you need to move to accommodate a larger team? Are any positions able to work remotely to save on office space?
4. Create a financial plan
Do you have a financial forecast in place that includes the anticipated growth in revenue and expenses? Is this forecast measuring your gross and net profit margins to ensure they stay tight or increase over time? Are you making a profit in your business that makes the expansion worthwhile?
5. Include what-if scenarios
Have you included various scenarios in your planning that demonstrate the worst scenario to the best scenario? It’s not enough to solely plan for reaching your goals in these situations, you also need to have a plan where you understand what would happen in your worst-case scenario.
6. Check on cash flow
You must plan for cash flow to ensure you can afford an expansion. The number one reason why expansions fail is due to cash shortages. There are many cash demands when growing as the revenue typically does not come in until later in the cycle, so good cash planning is vital.
The bottom line is many factors need to play together to create a successful plan to grow and expand your business. A plan that considers various angles will be the largest part of your success.
Grab a FREE copy of the 5-Step Roadmap to a Profitable Biz to help you understand what you need to know as the CEO of your business to create the most profitable business you can.
