One of the greatest mistakes that inexperienced and impulsive entrepreneurs make is feeling the thrill of the victory as soon as they generate their first profit. So they decide to start with a rapid expansion in order to catch up instead of focusing on continuity and ensuring that this early victory isn’t just a fluke but an actual trend of growth. Moreover, most businesses start operating in a deficit caused by a loan they’ve taken in order to launch, which means that overinvesting might result in a financial problem further down the line. Even though growth and expansion are always end-goals, you need to ensure that you haven’t rushed into them. With that in mind, here are several indicators that it’s the right time to grow your business.
You have regular customers
About 40 percent of your entire profit comes from purchases made by as little as 8 percent of your regular customers. The majority of fresh entrepreneurs make a mistake of believing that a huge increase in the number of first-time visitors means that they’re on the right path. While this may be true, it’s much more reliable to track your regular customers. Keep in mind that as an expanding business, you need a stream of income that you can count on. For this reason alone, you need to have loyal regular customers. Seeing as how the more purchases one makes from you the less effort it takes to keep them, this particular group yields an incredible ROI.
You’re constantly being asked about new products and services
These regular customers we’ve previously mentioned won’t have too much interest to stay with you over a prolonged period of time unless you start diversifying your offer. So, if you keep hearing inquiries about the same product over and over again, it might be time to include it in the offer. The problem here, however, lies in the fact that by the time your clients actually ask, it might be too late. The key to navigating this tricky landscape of offer and demand lies in knowing what your clients need before they figure it out themselves. The simplest way to do so is by prospecting the market through polls and comprehensive paid surveys online.
The industry itself is growing
It’s much easier to grow a business if the industry itself is growing. Sure, the number of competitors increases as well, however, an efficient competitor prepares the market for your arrival, while an inefficient competitor serves as an excellent reference point for your own professionalism. It’s also likely that you’ll have to collaborate with the rest of your niche, which is why a strong industry provides you with much stronger potential partners.
You have an increased workload
Perhaps the most obvious indicator that you need to grow your business is the scenario in which you have more work than you can handle. The main reason why we placed it as fourth instead of it being the first item on the list is due to the fact that it may be unreliable. Certain industries have a seasonal boost in demand, so the fact that you currently have more work than you can handle doesn’t have to mean that the same thing will keep happening in a month or two. Moreover, it’s quite possible that the increase you are currently experiencing is just a fluke, in which case, overinvesting and expanding would be a bad move to make.
You have a strong team
Most importantly, in order to grow, you need to have a strong team on your side. As a small business owner, you’re probably used to overseeing everything; however, once your business starts growing and expanding, you’ll be unable to keep micro-managing to this degree. This means that you need to have a team that you trust 100 percent, a team that you can entrust a certain degree of autonomy to without having to worry whether it will be executed properly. Furthermore, once you start bringing more people in (something we’ve previously mentioned), you’ll have to assign team leaders from your ranks or, at the very least, know that you have a part of your team that you don’t have to oversee as much.
Only after considering all five of these factors can you say with 100 percent certainty that it’s the right time for you to grow your business. As a first-time entrepreneur, you’ll feel the urge to rush into an expansion, believing that this will bring you much closer to the break-even point and the point of self-sustainability. Unfortunately, unless you have the market, infrastructure and business practices to follow up with this, you’ll find yourself in a scenario where you head unprepared into the unknown. This seldom ends well.