Business Perspective: Knowing when to expand in business

I read on the internet with sadness a story of a once billionaire woman who lost all her money and estate to her bankers due to poor decisions she made in her business. This woman was swimming in her success that she started expanding her business far and wide without following careful steps. Establishing one’s own business, big time or small is one of the most common steps that some people take in order to earn income. If you have a business and are prospering in your industry, then the next step you might think of is expanding your business. If you’re thinking of taking the next big step to expand your business, do not rush and expand right away. Competition in the market is a given thing. Your business cannot be successful if you are not armed. No matter how big your business is, without proper planning, expansion can lead you to downfall. The reasons a business may choose to expand are numerous and varied. At the core of any branch expansion decision lies the belief that there are additional sales and profit opportunities. Other considerations may include vendor pricing concessions as well as access to additional or unique products and better bargaining opportunities with lenders, insurers and other service providers. Therefore before a business owner decided to expand they should look into some of few things into consideration; The first thing you need to do is to establish some growth markers to see if the market is right for you to expand your business, some of these markers include items like money and working capital, customer related issues, products and services, and employees. When you are establishing these markers for your business, you need to make sure that you choose the markers that will have a large effect on the performance of your employees, business, or customers and that can be measured easily. An example of these types of growth markers would be the conversion rate from visitors to customers on your business’ web site. This is something that is easy to track and calculate and can give you an accurate picture if your business is growing or not. Another thing that you need to do is to completely understand your financials. Have your accountant go over the past year or two of your financial statements to see where the highest profit margin was, and where there might have been any cash problems. Once you know the highs and lows of your working capital, you can then go back and see what the triggers were that caused the rise, or fall, of your cash flow during those times. Once you understand your financials, and you have some growth markers in place, do some market research on your competition. Find out what they are doing and what new products they might be developing and see how you can use this information to shift the power from your customer base to your business. When you are looking at your competition, look at the ones that are the main players against your company. Once you have them in mind, compare your business to theirs and see where they might be excelling in areas that your business isn’t. This way, you can come up with a list of items that need to change in your business to create the right time to expand. You should also do some research on the market that you are in as well. For example, are there new trends that will spark customers to purchase your products or are there trends that will cause them to not purchase your products. Know your customer base and know the market that they fit into.Consider getting feedback from your customers through customer surveys or suggestion box. The trick is to find a product or item that you can give away to those who take the survey so you will be able to gain the information that you needed quickly. Once you have your trick in place to get people to take the survey, you can start to analyze the data when it comes in and see where you need to make changes in your business and where you don’t. As a business matures, there are times in its life cycle when it reaches critical mass and the apparent available opportunities within a given geographic area have been exploited to the fullest extent possible with existing products or services. At that point the business owner has essentially three options; add new products and services to the existing business expand to potential areas, or stop growing. But of course in many cases business people opt to take the risk in expanding the business.One of the most significant challenges facing business owners is the recognition of growth opportunities in many locations. Whether opening a new branch locally or in another city or state, a multitude of decisions and specific actions must be executed to ensure a successful expansion experience, so that one does not face a foreclosure of the entire business that one has worked so hard to build. Ends