There are about 30 million small businesses up and running in the U.S. as it is easy to start a small business compared to a large business since the latter requires more time and investment.
As per definition, a small business is one that has under 500 employees. However, small business do not always remain small as they all want to expand and increase profits. One important thing is – you need to know exactly when to expand.
There are three kinds of businesses in this regard:
- Businesses that decide to grow their business too quickly and end up failing miserably.
- Businesses that are doing great in terms of profit and cashflow and decide to grow at the right time.
- Businesses that do not cash in on the opportunity and are too late with the move.
When it comes to businesses, timing is the key. You need to know exactly when to pull the trigger. Let’s check out these five signs that can help you make this decision:
- Customer Demands Are Increasing
If you have been seeing a consistent growth in demand of a specific product but producing it on a larger scale feels difficult then it’s a sign to expand your business.
You may be short on raw materials, labor or managers to perfectly manage the extra production and expanding on these areas can help. However, before you do so, make sure to understand why there is a sudden increase in demand. At times the demand is temporary, such as the demand for juices during summer, and eventually settles down on its down.
2. You’ve Assembled The Right Team
A perfect team by your side means smooth and quick business operations. When each employee performs his or her part perfectly, the business improves.
No business can grow without the right set of employees, and once you are able to make a team, you are ready to take the next step.
Since growing typically also requires hiring more manpower, you must only attempt to grow once you have a solid foundation so that your old employees can help prepare the next batch of employees. Moreover, be sure to use proper hiring tests to make sure you only hire skilled employees otherwise managing a bigger business may get troublesome.
3. Steady Cash Flow
When the money keeps coming in, you need to invest it in the right place. There is no better way to invest hard earned profits than in the business so that you can make some more money.
Steady cash flow means you won’t have to depend on loans to fund your business. This is a great opportunity to take the business to the next level because the rewards are many when you have the right amount of cash flowing into the bank account.
4. You’ve Mastered The Art Of Managing The Business
It can be daunting to keep records of customers, vendors, employees and all the stuff that’s associated with running a business. However, when you get the hang of it, it’s time take the next step.
5. Your Industry Is Booming
If your industry is expected to grow, make sure to grow with it. You can be sure of this by seeing your past sales and expected future sales. Other than this, check what general data has to say and how the competitors are doing.
When an industry grows, it helps everyone and not just a few businesses. So cash in on this opportunity and buy or hire a bigger office space, get more employees on board and offer more to those demanding the product to be able to improve the bottomline.
If you see these signs and you think you have the ability to manage a bigger business, then do not hesitate in going for it.