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  • 30 July 2015
  • Eric Michaels

Knowing When to Expand your Small Business: Five Telltale Signs

If you set out expecting the establishment of your small business to be a long, arduous struggle, then you might be surprised by quick success. Sometimes the right plan, along with the right market conditions, leads to a winning formula in short order; in other cases, you end up having to battle your way into the industry. However you come into your success, the next question revolves around the decision to expand.

Small business owners often find this part scarier than the original move into the industry, and with good reason—financial troubles await those who leap before they look. These five telltale signs will help you decide if it is safe to expand your business:

Do the research that shows you there is a legitimate opportunity in any new areas.

1. You have more work than you can handle.
When you reach the point where you have more work than you can handle, you have come to a crossroad in the development of your business. Are new leads coming in without added marketing efforts (and thus, without spending any extra money)? If yes, the moment is perfect for expansion, whether you decide to hire more employees, open a new office location, or buy new equipment.

The trick is keeping the same level of quality and craftsmanship as you take on more work. To achieve this goal, you need to trust your staff enough to delegate. No one can expect to expand a business without passing on major responsibilities to his or her employees. Make your move only when you have the right team behind you.

2. Research says the market is there.
Winning one market does not guarantee the same business plan will work in a market just one zip code away. Do the research that shows you there is a legitimate opportunity in any new areas. Practical concerns in territory expansion include staffing local employees and setting up an office to keep commutes to a minimum. Opening a new location and increasing the commute time (and, therefore, work hours) of your team is never recommended.

3. The funds are in place.
For some entrepreneurs, all signs point to expansion—except for a telltale lack of funds in their business bank accounts. If you have the luxury of extra funding lined up or new investors impressed by your business model, consider yourself blessed and move forward with your expansion plans. A proven formula backed by the right team and minimal financial risk is the perfect way to expand to new markets.

4. You have checked off your original goals.
Say you wanted to open a business that made you a comfortable living and allowed you time to enjoy your life away from the job. You may start finding that your passion for your business is no longer as strong as when you launched the company. These signs point to an unfulfilled aspect of your professional development. If expanding the business in question is unappealing, consider moving on to a new project. You may be a serial entrepreneur ready for the next move.

5. Franchises await.
The opportunity to franchise your business may present itself when you cannot get financing on your own. This situation is most appealing when you have a strong managerial team around you and can adjust your business plan to allow franchisees an opportunity around the country (or the world). Risk is minimal when you have partners opening new locations, and you have the potential to make handsome royalties without the day-to-day hassle of managing each location.

The time to expand often presents itself at a happy moment in a business's development. While you do not want to rush into anything you cannot handle, passing on a genuine opportunity could come back to haunt you. Churchill Leadership Group, specializing in business coaching for any size business, can help you find the right formula for your company's expansion. Take advantage of special offers for Churchill's services from The UPS Store today.

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