Once you get over the initial struggle to get to profitability in the early days of starting a small business, you coast along, happy to have no major issues to worry about. But how do you know when it’s time to grow, to expand, or to hire new people? These 10 signs will alert you that you’re ready to move to the next level with your business.
1. You or Your Staff Are Swamped. If you’ve got more business and work than you can handle, it may be time to hire more people. Temporary, freelance, part-time and full-time are all options, depending on your needs and budget.
2. Employees are overloaded, haven’t gotten raises, and are starting to leave. Having a lot of work is a good thing in one sense. But when you have too much work but can’t afford to pay people properly to do it — then it’s often a sign of flagging sales or pricing imbalances. Raise prices, bring in more sales talent, launch a special upgrade customer promotion – somehow you have to increase your top line to do the right thing by your people. Time to shake things up!
3. Your Customers Are Demanding More and You Can’t Keep Products on the Shelf. Your initial products were so successful, but now your customers want more options or additional products. You’re lucky if this is the case; having a built-in audience clamoring to buy a yet-nonexistent product means you’re on the right path. Invest money into giving them what they want.
It might also be time to step up your manufacturing or the size of your orders. With this increase in purchase, try to negotiate a lower per-unit price. If you’re buying bigger, chances are your supplier can afford to give you a discount.
4. Costs are growing faster than sales. If your costs keep rising, but profits and/or sales are not (or worse are declining), it requires a closer look. Unless there’s a good explanation – such as investing in new product development or a large marketing campaign that hasn’t had time to pay off yet – you may have some deadwood to clear out. For example, do you have unprofitable product lines that you need to jettison, or free services that you may need to start charging for? Not only do these things hurt profitability, but they hold the company back and divert resources from better opportunities. Just like with an old shrub that will send forth fresh growth with a hard pruning, your business may need a pruning in order to grow.
5. There’s Not Enough Space. CorpNet recently had this problem (and it’s a good problem to have). With the business growing so quickly, there wasn’t enough room for all the employees and equipment. And so they expanded into 3x the office space.
6. You’re Behind in Orders. This is a red flag that should quickly be amended. Whether it’s because you don’t have enough stock to fulfill orders or enough staff to do the labor, fix it quickly. You never want your customers to see any disruption in service, especially when it’s for a good reason, like being ready to grow.
7. You’re No Longer the Industry Leader. This may not seem like the best time for growth, but if once upon a time you were known for your innovative products, and now the competition is just behind you (or ahead of you), it could be time to look into growing into new areas, or investing in innovative research for the next big thing.
8. You Want to Make More Money. If you’ve been doing well as a company but you want to really increase your revenue, you can do that one of several ways:
- increase prices
- offer new products
- upsell to existing customers
Whichever you choose, account for the accompanying growth.
9. People Want to Buy Your Company. If you’re not interested in selling, take a potential offer as a huge compliment. You’re doing something right. Keep doing it on an increasingly more intense level. Reassess selling in a few years.
10. There Are New Opportunities. If your industry has presented some new opportunities, thanks to evolution of technology, lowering of prices to produce your product, or other reason, consider how you can take advantage of this through growth.
Growing isn’t always easy, but it generally produces positive results. Grow when you’re ready, and do so in a deliberate and planned manner.