Think your business is ready for expansion?

If you’ve been running a business for a while now and things are going well, you might be toying with the idea of expanding. Can your business survive the additional costs and weight of expansion? There are a few things you need to consider carefully before embarking on an expansion plan and these include the following:


Your business needs to be a position where you are at least hitting or even surpassing your goals. If your brand is well-recognised and your sales are growing then it still might not be the right time for expansion unless you can be confident that you’re meeting your goals. The success of a company expansion relies in being able to set goals and meet them within a set period of time. If this is happening then you’ll have solid confidence and this will be easier when taking your pitch to potential investors.

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Will the costs of expansion be outweighed by the profits made as a result of the expansion? There will always be operating costs but the desired result is to make the increased revenues cost less to achieve than existing revenues.

Management Systems

Before taking on the extra burden of expansion, are your systems robust enough to cope? If you have a large customer or member base, systems like membership management software can improve efficiency, decrease the amount of paperwork you deal with, enable you to target marketing more effectively and make administration a smoother process. For Membership Management Software packages, visit

Cash Flow

Expanding will hopefully bring money flowing into your business but it also costs so you need to be in a good position with regards to cash flow as you might be carrying the business financially until sales catch up with the investments. You need to consider whether your business is better at generating revenue or profit. If you’re in a much stronger position for profit then expansion could well be the way forward. If revenue minus costs doesn’t produce much profit then expansion might not benefit your business much.

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Your marketing network should be strong and effective in order to achieve a successful expansion. Starting a business locally means you will have had referrals from friends and family, the better the service you offer, the more your local reputation grows and improves. Setting up in a new area means you won’t necessarily have these benefits and you’ll have to start from scratch again. There could be a completely different demographic which means a new tailored approach to marketing and networking.


Are both your head and heart committed to a new wave of business expansion? Consider the feelings of your staff and team too as growth is always more successful if everyone is working in sync. Do you have people with the right leadership and ambition to take your business forward? A shared vision and set of values are important because economic benefits are not likely to provide enough motivation to see an expansion through the associated challenges involved.

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