Is it the right time to expand the business?
If revenue streams are growing at your flagship location, your business may be ripe for expansion. But just because business is booming doesn’t mean you have to make assumptions about your potential for success in a new market (local or global).
Taking on additional overhead should be a strategic decision driven by potential new revenue, lower expenses, or a competitive advantage that sets the business apart. Below are the critical questions Fast Company’s board members urge you to ask yourself before moving forward with the right plans to grow the business.
1. IS YOUR TEAM READY?
The first thing is the preparation of the team. You cannot replicate yourself. Therefore, ask yourself if you have a strong team around you that is aligned with your values, drive and motivations and that you can also trust? – Sunil Rajasekar, Mindbody
2. WHAT ARE THE RISKS OR OBSTACLES?
Do a pre-mortem analysis and include skeptics in your discussions to consider some cold, hard truths. Whether you plan to open a second or third location to meet customer demand, enter a new market, or simply capitalize on opportunities that have arisen, first assume that the worst has happened. Then work backwards. The right time is when you have eliminated all risks and obstacles. – Ido Wiesenberg, Voyantis
3. DOES YOUR WORKFLOW PROCESS RUN SIMPLY?
When you’re absolutely sure you’ve got it nailed once, and when every part of that process is defined and working properly, then you can be ready to grow. You will also need to make sure you have a team in place that can respond to every crisis situation without you or with your minimal involvement. It’s a good time to move to the second slot when everything is working then although it is even a bit boring. And the same goes for each consecutive. –Solomon Timothy, OneIMS
4. DOES THE NEW LOCATION MAKE BUSINESS SENSE?
For those of us in professional services, the key to new locations is proximity to customers, key suppliers or employee epicenters. Taking on additional overhead should be a strategic decision that very clearly drives revenue, lowers expenses, or provides a competitive advantage or differentiator. Extra locations and nice offices are a badge of honor and should make business sense. – Ed Beltran, Fierce, Inc.
5. IS IT POSSIBLE TO OFFER A HYBRID-REMOTE SOLUTION?
When geo-targeting is needed for a particular market segment, it’s time to consider opening new locations. However, we have noticed office consolidations and downgrades during the COVID-19 pandemic in the service and consulting industries due to the increase in hybrid working and work-from-home arrangements. As a result, businesses are more efficient at serving customers remotely than they were in previous years. – Goran Paun, ArtVersion
6. ARE THERE EMPLOYEES IN THE TARGET AREA?
A healthy mix between your target audience and your employees will dictate the need for a new location for your business. In the age of distribution, you may find that you already have five to 10 employees working remotely from a certain country. If you also have new business to find in the same area, a new office is a must. – Yoav Vilner, Walnut
7. ARE YOUR STAFF MEMBERS WILLING TO TRAIN AND EMPOWER OTHERS?
As your market demand and financial situation begin to solidify in a market, begin to seize opportunities and strategize for future expansion. To ensure success, you must have the right people to lead your second or third location, so explore if some of your existing staff might be interested in sharing their knowledge with a new team and empowering them to lead the way. – Andreea Vanacker, SPARKX5
8. ARE YOUR INCOME STABLE?
If you see steady streams of income from your flagship location, your business may be ready to grow. It’s all about distribution. If you can scale it, why not? If you see an available location in a neighborhood, study the demographics to find out if your business can fit into that individual community. If you discover that your business box be a welcome addition to a new community, then this is your sign! – Brandon Pena, BrandON Media Group
9. ARE YOU CHOOSING AN EFFECTIVE LOCATION?
Choose the right location! Gary Halbert, a brilliant copywriter once said, “Give me a hungry audience.” That’s why Wendy’s and Burger King set up their restaurants across from McDonald’s. Neither have a research department, which saves them a fortune. McDonald’s creates demand. It’s all about risk reduction! – Mike Koenigs, the superpower accelerator
10. WILL YOU SELL A NEW LOCATION TO EXISTING CUSTOMERS IN ADVANCE?
If you wait until you have solved all the problems before you develop, it may never happen. A good strategy when opening a second or third location is to pre-sell to customers in that second location and migrate customers from the first location to the new location to solidify growth and profitability. . To do this, you must first have sufficient working capital. – Ray Titus, United Franchise Group
11. CAN YOUR SYSTEMS AND PROCESSES BE EASILY REPEATED?
It’s time to grow once your systems and processes can be easily replicated. Is your business systemized enough to be handed over to a new group of location managers who can quickly get up to speed and take charge of a new location in the same way as your flagship region? If so, it’s time to consider expansion, especially if you feel expansion is necessary when a geographic area is being mined. – Tyrone Foster, InvestNet, LLC