In the world of business, you should never be in a position of settling for what you’ve got. Business is all about growth, development and becoming the best you can possibly be. At points, you’ll reach the top of your potential in the circumstances you’re in, and you’ll need to grow by either hiring more members of staff, expanding into bigger premises or increasing your capacity in some other way. We explain how to know it’s time to expand your business.
Your revenue plateaus
As a business owner, you can often get a feeling of whether things are going well for the month. However, sometimes you can have month after month of feeling like things have gone really well, but you won’t see any real change in your bottom line. In this case, it’s likely that your business has reached its revenue capacity. By shifting all of the products you can possibly get in within a month, you’ve effectively reached your full potential. Although this alone isn’t enough to initiate business growth, it is a good sign you need to expand to move forwards.
You have a couple of months of operating costs saved
If your company has maximised revenue, you may need to grow very quickly. You can only do so comfortably if you have a couple of months of operating costs in reserve, since moving location and upgrading your supply chain can be big disruptions to your company. In order to cover any lost income during this period, a chunk of backed up savings can be a good safety net to make sure you’re not under pressure to rush into operations again.
If your wider industry is growing
When your company is part of a growing industry, there’s always the potential for the business itself to grow too. When your company is already riding high, seeing the industry around you doing well is a sign that expansion will go well, and you might not need to dip into the savings you’ve accrued for the transition period.
Business expansion is always a risk, but by ensuring all of these criteria are fulfilled you can go through with your growth in a safe manner, with minimal risk of financial damage going forwards. Your business can roll on bigger and better than ever.
Time to expand your business – where to find out more
Tower offers a full range of finance solutions – products and services aimed at business development and growth. Regardless of how much capital you need or how big you are as a company we can normally help. Read about our business finance solutions or get in touch to discuss how we can help you expand your business.