Doing the passion for profit tour and meeting so many enthusiastic people ready to take that step and begin a venture has been incredibly inspiring. Last week I wrote about how to maintain your enthusiasm and stay positive when facing obstacles. Today, I want to talk about what you should consider before expanding a successful business.
Plan your Expansion
I know that some of you out there will quickly come across clients. Many of you have long lists of contacts and offer a great service. There is every chance that demand for your enterprise will be strong, but running a successful business can almost be as challenging as running a struggling business. You need to decide when you are going to take on new clients, what new services should you offer and when do you need to rent an office. You might start feeling pressured or stressed, but if you manage your emotions and carefully plan the expansion, your business will continue to be a great success.
Ask Yourself these Questions
Before expanding your business there are some questions you need to ask yourself about the structure of your enterprise and your personal life. The first question you must address is can you properly service the number of clients you already have. You do not want to bite off more than you can chew. Perhaps you are a life coach and the reason your business is successful is because you offer a personalised service and pay close attention to the needs of clients. If you were to quickly double your client numbers, it might be impossible for you to continue giving that detailed personal care. People might have signed up with you because you are highly recommended, but if you over-commit yourself you won’t be able to deliver the excellent service you are renowned for. You are killing the goose that lays the golden eggs! You are undermining your own business by expanding too quickly. Before expanding, assess what you are capable of. Perhaps you need to wait until you have more resources and time. It is okay to tell potential clients that you do not have an opening, but will place them on a waiting list. Sure, they may go elsewhere, but you do not want to give them sub-standard care. Do you need to recruit staff? This needs to be done slowly and carefully. It would be a mistake to hire the first person who comes along because you don’t want to miss out on new clients. What if your new staff member is hopeless and frightens off clients? What if that new employee ruins your reputation? When it comes to expanding in business, the tortoise not the hare wins. You need to proceed slowly and cautiously.
The next question to ask: is can you afford to expand this quickly? I know there are many people out there who have a full-time job but are running an online business in their own time, usually on weekends or in the evenings. In many respects this is a great balance. Your day job delivers a steady, reliable wage while your own business gives you the chance to be creative and entrepreneurial, but there comes a time when your business has so many clients it is impossible to keep your day job and expand your business. You need to ask yourself if you can afford to quit your job and expand your business. It is a very important question. I know I am always telling you to follow your dreams, but you should be pragmatic, sensible and cautious when following dreams. My advice is to hold onto your day job for as long as possible, even if that means hiring someone to help with your business. You need to be generating a great profit for at least a year, perhaps even two, before giving up a well-paid secure job. Full-time jobs are getting harder and harder to come by. Perhaps you hate your job, but I still say hang in there. You will dislike your job less if you have a side business you are passionate about. This will give you an outlet for your ingenuity.
Check your Finances
If you are considering expanding your business by leasing an office or hiring staff, check your finances carefully first. You may find the bills are much bigger than you anticipated. Have you factored in the cost of superannuation and insurance in putting on staff? How long is your new lease for? What is the penalty for breaking the lease of the office if demand for your services drops off? Expanding too soon can undermine the profitability of a business. Again, proceed with caution.
Check your Competitors
Another helpful question to ask is what happened to your competitors when they expanded. Have your competitors already expanded? If their expansion has been a huge success, it will embolden you to go ahead with your plans. By offering your services as an alternative to an already successful large business, you can lure away some of their customers. That is how business works! If your opposition’s expansion has been a success you need to move quickly otherwise they will become the big kid on the block and lock you out of the market.
Find a Balance
One of the most important questions to ask is: what impact will the expansion have on your personal life? Many people turn their passion into profit because they were tired of working full-time. They wanted a quieter life, even if it means having less income. If you are happy working just a few hours a week, what is the point of expanding? There is no point leaving a stressful job only to create a demanding huge business, which eats up all of your time.
If you are younger and growing your business to establish a secure income-stream for your future you are going to have to work hard and put in long hours. Is your spouse aware of what you are doing, why you are doing it and the impact it will have on your family? Too many marriages break down because the husband puts in long hours trying to grow a business and be a good provider, but the wife ends up feeling second-best, neglected and unloved. Please do not make that mistake. Expanding your business is not something you should do on a whim or without the blessing of your spouse. You may have the funds, the time and the resources but if it destroys your family, what is the point?
Expanding a business will present you with new problems and challenges. You need to be prepared to tackle them and come through the other side as a winner, but before rushing into anything consider the points I’ve made.