It’s a pivotal moment in an entrepreneur’s journey when they get the itch to expand their empire. Your business is fully off the ground! Pat yourself on the back for a job well done, then pump your breaks! Ask yourself a few questions before taking the plunge toward expansion. There are quite a few things that need to be carefully and objectively examined to make expansion successful.
Are you clear about why you’re expanding?
Do you plan to sell your company in a few years? Or do you want to be a part of the growth of your business for years and years to come? The smaller the time frame for which you will be involved, the more you’ll have to hone in on making sure your current product is top quality. If your business is a long-term commitment for you, you should be focusing on things like the geographical commitments and your capability to achieve your goals in new markets. The “why” factor will inform many of your decisions in this process.
Are you meeting your current goals?
Things like awards and publicity are great achievements but not always solid grounds for expansion. It may not be the best time to expand if you are not surpassing goals. Instead, focus on adjusting your present goals or discovering new ways to exceed the ones you already have in place. If partnering with an investor or selling the company is part of your long-term vision, this will play an integral part in doing that.
Will you be able to replicate your business model?
Establishing a business model that is secure is imperative before expansion. Spend a considerable amount of time fine-tuning your day-to-day practices, chains of command, mission and values. Make sure all of those processes and guidelines are written down on paper so that they are transferrable. Narrowing down your business into formulas, will not only streamline daily workflows, it’ll also put your company in a much better position for expansion.
Do you have the right team to run your business?
Think about the challenges you faced when you built your current team. Putting just the right person in just the right position to succeed isn’t always easy. When you’re looking for a person to take ownership and oversee an extension of your company in a remote location, the stakes are even higher. Take your time finding people who align with your company’s mission and culture. It may be a good idea to promote someone solid who is already on your team to run the location in a new market.
Can you really afford it?
It’s in your best interest to sit down with a financial expert to analyze the cost of expansion. Many business owners who bank with us are surprised to find that costs of expanding to a new market is sometimes substantially higher in comparison to their current location. New towns, states, and cities have fees you may not be aware of for brick and mortar businesses. Visit us at Litchfield Bancorp and we can help you on your journey to expanding your business!
Margret K. Warner
Vice President, Commercial Lender
Director of Business Services