Business Expansion: It Can Be Good, It Can Be Bad...
Most business owners hope their business will grow and be successful. Others want to remain a one person business. They left their previous jobs to start their own business so they would no longer have to work for someone else.
In addition, growth can generate a whole new set of problems that most business owners don't' want to deal with.
With growth goes more responsibility. Sometimes employees that were able to handle certain levels of business are overwhelmed by the new load of responsibilities. And so are you as the owner.
Now instead of your little one person operation you have; delivery people, a part time bookkeeper, two or three full time employees, someone to answer phones and take orders and counter people or outside sales.
In addition to that add; absenteeism, employee benefits, vacations, profit sharing plans, payroll taxes, higher overhead and increased liability insurance.
Next problem; communication. With one or two people a quick meeting has everyone of the same page. With multiple locations a "team meeting" becomes a logistic nightmare to get everyone together at the same time for information to be past or training to be done.
Last but not least; This business is your dream. It's not your employees dream. They have their own dreams that don't include you.
So you have leadership and motivation of employees to contend with. See: "How To Lead & Motivate: (Yourself and Your Employees."
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What Are The Business Expansion "Triggers" You Should Look For
How do you know when the time is right to kick the business into high gear? Or, to use a much overused expression, when to take the business to the "next level?" Are there signs to watch for to let you know when the time is right?
Here are some of the most obvious:
- You can no longer fill customer needs in a timely manner. If customers are leaving empty handed or going to your competitor because you are "too busy" then the time has come to do something.
Employees can no longer keep up with production demands. They begin making more and more mistakes and missing deadlines. Absenteeism increases and production falls. Due to the increased pressures of your job you begin making poor business decisions or using a "quick fix" for problems that need long term repair.
- Reaction to the competition. If you are equal to your competitors then you may not need to do anything. If, however, they are expanding and taking business from you because of that expansion you should at least evaluate the possibility of expansion.
- Don' t misunderstand the above. I'm a big believer in "NOT" reacting to every little thing the competition does. That's why I advise you to "evaluate" the situation and not over react.
Changes in the marketplace or industry. Your business is affected by many factors. One of those factors is the very industry you are in. Government regulations may force additional equipment or other costly changes.
New products or services might force you to change the way you do business. In New York City, newspaper stands are in trouble because people who used to buy out of town newspapers now get the same information on the internet sooner and for free.
- Customer perception or your goods or services: Back in the 1970's seven people died from taking Tylenol® which had been laced with poison. Tylenol® reacted quickly to remove all their product from store shelves. It took a long time to regain their leading market share but they did it.
But at sustained cost increase. A whole new form of packaging had to be developed. Tamper proof packaging had to be implemented alone with stricter inspections.
Not just at Tylenol® but all pharmaceutical companies had to retool for this change in customer and government demands for safety.
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Are There Any Ways To Postpone Expansion?
Yes. There are some short term measures you can take that may buy you a little time before you must take the plunge. Not every one works for every business but one or two will work for most.
Here are a couple of things a business can do: