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No one starts a business thinking it will fail. Just like the beginnings of a new relationship, starting a new company is exciting, exhilarating, and fresh
August 16, 2018 / By Terri Boote
No one starts a business thinking it will fail. Just like the beginnings of a new relationship, starting a new company is exciting, exhilarating, and fresh. When you first start out, you’re not sure where things will end up, but you know where you’d like your new business to go. You have boundless energy and can put in hours and hours of work to get things off the ground. Honestly, you’re just so enthusiastic about getting started!
You might find that after slogging away and doing the hard work, things start to go well. specific might even be going so well that you don’t seem to have enough hours left in the day anymore.
Woohoo! Well done! How do you know if you’re ready for things to get a little more serious? Hiring staff is a substantial risk. You don’t want to lose what you’ve worked so hard for, but you also don’t want to limit yourself by being afraid to expand.
Is it the right time to grow your business? If you think it might be time to build your small business, we suggest you ask yourself the following questions:
Is this really what I want?
Your head has to be in the game. You have to be entirely committed to your cause and ready to make sacrifices and go the extra mile. Growing a business is hard, can be stressful, and requires you to bring you’re ‘A’ game to overcome new challenges and obstacles.
If you have any doubts about your readiness to take this on, it’s probably not the right time to expand your business.
Do I have regular clients and a steady income?
It’s that old cliché of needing money to make money. To grow your business, you will probably need to invest in people or equipment. So you want to have enough cash behind you for that transitional period until your income catches up to the costs you will need to outlay.
Cash flow and profit are the most important considerations here. Money coming in is excellent, but it has to be higher than the money going out. If you have little or no profit margin, now is not the time to be expanding.
Having a reliable pipeline of regular work and income forecast is imperative. Not only is there a constant, steady flow of cash coming into your bank account, but it is also a reassurance that there is a demand for your business. That means your growth can be sustainable over time and not merely short-term.
Do I have the resources available?
Growing your business will usually mean hiring a team member, taking on a contractor, or outsourcing some work to a service provider. Before you jump in and hire a full-time employee, consider the total cost – it is not just their salary you will need to pay (don’t forget the KiwiSaver and Holiday pay). It is any equipment they will use, space for them to work and many other things.
That is why it can be a good idea to start with a contractor, or by outsourcing certain tasks. Taking some admin tasks off your plate by passing them over to a skilled Virtual Assistant can free up hours every week, which will allow you to focus on business expansion.
Will the profit outweigh the cost of expanding?
It is essential to sit down and look at the numbers and logistics of expansion to ensure it is financially viable. If you can effectively minimise the increase in operating costs while you continue to expand, your business will become scalable.
If you have to go all out with huge transitional expansion costs at the start, it’s likely that your revenue will struggle to keep up and your expansion could fail. Create a strategic plan so that you know how your expansion will involve to give it the best chance of success.
Is my marketing strategy sufficient?
Marketing is crucial to the success of any business. You can offer any service you like – but if no one knows you’re there, you aren’t going to generate any work. How you understand and reach your clients can make a huge difference when you start to expand.
This is especially important if you are expanding into unchartered waters, or areas you don’t yet have a presence in. You can no longer rely on word of mouth – you really have to get yourself out there with an excellent marketing strategy. It might be worth consulting with marketing and SEO specialists to make sure you’re covering all your bases.
So how did you go on the questions?
If you answered yes to them all, then it may well be time to expand your business! You will need a smart strategy and the right resources, so we suggest doing some research to figure out your next exciting steps.
We always recommend starting small and testing the waters first. We offer a package of VA services that give you back one hour every day. It can be a great way to check things out and begin your plans for world domination! Get in touch today on +64 4 391 8989.
Good luck with the next stage of your business – expansion!