While expanding your business is a step in the right direction, it can be a scary process. One mistake could cost you your entire business, but if you’re lucky, it could also be just another learning step. This blog will be looking at some of the pitfalls to look out for when expanding your business.
Failure to create a credible action plan
When planning any form of business growth, planning is critical. You have to think about issues like how you will keep up with increased demand, how you will reach customers, where you will get additional funding, etc. Answering these questions before you expand will help you peek into problems that may arise along the way and help you come up with possible solutions. As part of the planning and preparation process, it is also important to establish a timeline for implementing your plans. This will help you track your progress and stay on top of things during the entire process.
Underestimating costs
This is the most damaging mistake you can make during business expansion. Without enough capital, you will not be able to sustain business growth, and all your plans will be futile. Some of the most common expenses that entrepreneurs are likely to underestimate include product development, maintenance and repairs, marketing and advertising, taxes, human resources, and insurance.
Compromising on talent
Another grave mistake that business owners make when expanding is hiring inexperienced workers to reduce expenses. Employees are the backbone of a company, and their experience and expertise affect your company’s outcome. If your budget is limited, think of ways to reduce labour costs without compromising on quality. A good way to do this is by outsourcing labour from third party companies or working with freelancers.
Growing too fast
While every business owner wants to grow and expand, growing your business too rapidly can cause more harm than good. Business growth comes with increased expenses, and without enough time to establish proper cash flow, it will be tough to keep up with the costs. In addition to that, keeping up with the increased demand can be challenging, resulting in negative feedback from customers.
Business expansion requires meticulous planning and preparation. If you feel unprepared, don’t be afraid to take a step back and re-evaluate your plans.
Business expansion mistakes – find out more
Tower Leasing have supported the investment and growth of over 40,000 SMEs. No matter what your plans are, we have the business finance products in place and the expertise to help you see them through. Read about our business finance solutions or get in touch to find out how we can help finance your next business expansion.
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