Establishing a successful and profitable business is an achievement in and of itself. Eventually, an entrepreneur may want to expand their operations. Growth is a very dangerous condition for a business. Expand too fast, and the company may end up insolvent. Manage the process poorly, and a previously successful company could find itself without a customer base.
Proper planning is crucial for any business expansion. The four steps below can help to increase someone’s chances of taking their company to the next level with minimal operational risk.
Understand how to preserve quality
Whether producing physical products or providing a service, a company will need to ensure it can scale up operations without reducing quality. Developing an effective way to mass produce what is successful on a small scale can take longer than many entrepreneurs realize.
Look into the market
A company successful now could find itself floundering in just a few years. There was a time not long ago when gold-buying shops proliferated in strip malls and other retail areas. Although some still exist, they are far from the ubiquitous presence they once were. Entrepreneurs looking to expand need to look at the historical market for their goods or services and attempt to project future demand to ensure that they aren’t over-investing in a trend. There needs to be enough demand sustained for the foreseeable future to justify the expansion.
Recognize that slower growth is often more sustainable
There are times when businesses struggle to meet consumer demand. It may be tempting to double or triple operating space or to open multiple other facilities at once in an attempt to meet that surge in demand. However, small, carefully-planned steps will minimize a company’s financial exposure during expansion and therefore what it stands to lose should that attempt prove unsuccessful.
Review existing contracts
A growing business will need more workers, and with additional staff members will come increased risk of harassment claims, interpersonal conflicts and other human resources issues. More workers may also mean more risk of intellectual property violations or employment law claims. Businesses will often need to review their employment contracts and expand or retool them to match the needs of the growing organization. Vendor contracts and leases may also require reevaluation.
Discussing entrepreneurial aspirations with a lawyer who practices business law may lead to more sustainable and effective expansion efforts.