24 Jan The Best Time To Expand
They say timing is everything. But before timing you have to show up at the door for business to begin. These two principles are the basis for identifying and managing company growth. They are age-old business adages, yet are forgotten in the heat of competitive battle.
Opening The Doors
Experienced business people know that getting your business off the ground is one of the most difficult tasks a person can undertake. The reason is that despite all the planning, research, and optimism there will still come the unexpected which always seems to come at the wrong time. A key to getting through this first crisis is not to overreact but to respond with a plan. Avoiding the idea that everything needs to be fixed in a day goes a long way in helping you to respond calmly and effectively.
Opportunities for expansion come in very similar packaging to crises. Identifying the opportunity can be the result of a well-planned and comprehensive business plan. The ship is on course but there is a need to take on more cargo. One of the more common responses to identifying expansion opportunities is fear.
To move forward, expanding your business midstream is as natural as starting it. But the fear of success is usually present, so though all the signs are there to move forward, there tends to be a hesitancy to start gaining momentum. Why? The usual perception is that you cannot turn back once you seize an opportunity. That puts your life’s work at risk if your judgment is wrong.
What is left is to select key identifying factors that are virtually unshakeable unless you want to completely deny reality. For example, if you are unable to meet deadlines because of your workload, and that workload continues to increase, it is a sign that expansion is necessary. This may be seen in employees who are beginning to burn out or even in losing business because you are unable to meet customer demands.
Choosing The Timing
Given what has been said above, much of a business’s success depends on deciding the best time to expand. Any identifying factors need to be understood in the context of the broader company operations and goals. Here’s a simple example: during the month of July there is an intense demand for swimsuits. The fact that you may not be able to keep up with the orders is a seasonal issue, showing that you have planned poorly to meet the demand based on last year’s sales data. Like a profit and loss statement, your decisions must cover a reasonable period of time and reflect data that are applicable and consistent over time.
Another consideration in identifying expansion and timing is reaction to the competition. Just because the competition is expanding in a growing market does not imply that you must expand in kind. A key factor is the financial ability of the company to handle expansion, whether it means additional staff, purchasing more equipment, or building a new plant. A hard reality is that while expansion seems necessary, it may not be possible within the time frame offered to you. While a lack of proper planning is likely to cause a loss of market share, expansion without proper preparation can cost much more than just a loss of market share.
Much of expansion is about the mindset and confidence an owner has about what the company is about to engage in. Overoptimistic or overenthusiastic owners may get the timing wrong, while fearful owners may miss the opportunity altogether. The opportunities for expansion will come, but you need to look for them and prepare yourself for when the perfect time comes.