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If business is going well, you may be thinking about expanding. Before launching into any new markets, here is some key information you must consider. First, you'll want to make sure the current success of your business is not a fad. Do some forecasting to make sure the market will keep rising in your new area. You also want to take a very close look at the area you're expanding into. Is there a need for your product or service that hasn't been provided in the past? Make sure another competitor hasn't already gotten the jump on you, established themselves and cornered the market.
A New Market
Once you've established the markets, make sure you're ready for the shift. You'll definitely need to change and expand your original business plan to reflect this move. You need to start running your small business as if it were a big business for awhile before you'll be able to tell if expansion will work for you.
Hard Facts
You will also need to consider the logistics of expanding. Do you have the capital you need to expand? Do you have enough trained staff to smoothly transition into a new market? Have you done your research and examined all of the legal considerations involved in expanding?
Are You Ready?
You also need to consider the added stress on yourself. Is it worth it? Many entrepreneurs have expanded their enterprises only to have their business take over their lives. Unchecked expansion may be great for the bottom line, but what are the other costs? When you first started your business, you probably hoped that one day you'd have more time to spend with your friends and family. By pushing to expand relentlessly, you may find your personal life falling apart around you.
Deciding whether or not to expand your business into new markets can be difficult and complicated. Make sure you have all the facts before moving ahead.
Reaching Capacity
As your business grows you may run up against limitations imposed by the size of your facilities, the number of your employees, or both. It's critical you anticipate and plan for these occurrences. If you're unable to grow to meet increasing demands, you may lose customers and profits to your competition.
Facility Requirements
It's critical your facilities are the right size. Unnecessarily large facilities may create a drain on your finances and slow your growth. Small facilities may require you to relocate or expand before you're financially able. Do not underestimate the effects of a small facility, as cramped quarters can be an enormous efficiency problem for workers.
When you decide it's necessary to expand or relocate, you'll need to begin the search for a new facility. It's important to choose a facility that meets not only your business needs, but also the needs of your customers. You'll need to carefully consider the location, condition and use of the new facility.
New Employees
It's also crucial to have the right number of employees to promote and support growth. Having too many employees not only slows financial growth, but also can cause workplace inefficiency if your workers are idle. That said, you don't want to overwork your employees. Aside from the costs of overtime, tired and irritable employees will have poor morale, which could cost you more than just money.
Determining whether you need new employees is a cost/benefit question. The obvious hard cost is in the form of wages and benefits, but you should also consider the time and effort required to train new employees. On the other hand, the benefits of having new workers are sometimes hard to quantify. Will new employees free up time for you to market your services? Will they directly increase production or allow you to serve more customers or clients? Are there new roles that need to be filled in order to provide new or better services? If you can't answer yes to one of these questions, you probably shouldn't hire anybody.
Remember: Expansion is a sign of a healthy business.
Marketing
You have your products or services. Now, how do you get them out to potential customers? By putting together a comprehensive marketing budget and learning which types of advertising and promotion will work best for you, you'll have no problems attracting new customers.
Payroll
We all know how important it is to receive your paycheque on time, so it's important to remember this when you're the one handing out the money. Here are a few tips that may help keep your payroll system running smoothly.
Working Capital
While it's important for your business to have a positive cash flow, it's not always easy –especially if your business is expanding. Here are a few things you can learn to help ensure you have the working capital you need.
Capacity Planning
Ultimately, all businesses want to prosper, and this often means expansion. Look toward the future and make sure you have the facilities and the employees to accommodate these changes.
Establishing a Sales Force
Becoming an employer isn't always as easy as it sounds. To find the right person for the job, you need to know what to look for and where to look. We have some advice to help you choose the right employees for your business.
Distribution
It's important to find the best method to make your products or services accessible to your customers. It's equally important to find a secure way to get the supplies you need to operate. Here are some hints that may help.
Accessing External Markets & Foreign Exchange Considerations
There is a great deal of money to be made by reaching out to foreign markets. There are also important considerations to be made in choosing the appropriate markets and protecting your business against fluctuations in the Foreign Exchange Rate.
Technology Considerations
Nearly every business involves technology and the Internet is becoming more and more vital for businesses these days. Make sure you have the technology you need to be competitive, without going overboard.
Human Resource Issues
If you started your business by yourself, the decision to hire extra help could bring problems. It can be hard to delegate authority, but it is a critical step in the growth of any business. Here are some tips that may help.
Alliances
Sometimes two heads are better than one – especially if the people both have unique skills that complement each other. Forming alliances can improve the products, services and customer base of any business.
Research & Development
Make sure you do as much research and development as possible, even if your business is making a good profit. There may be taxes you're unaware of or ways to cut overhead costs. It always pays to do research.
New Markets
Once you've felt the excitement of success, it's natural to want to expand and increase your market. Before you do, take the time to make sure you're ready to open your business to any new market.
Staying Ahead
The world of business is an unsteady one. As hard as it is to get to the top, it's just as hard to stay there. Always keep an eye on the competition and make sure you make the right moves to stay ahead.
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