When Should a Business Expand?
Starting a business is hard, making it successful is even harder. Once a company has hit its first few major milestones, many will start to think about going to try and carve out a bigger chunk of the market for themselves. This has been the downfall of more than one promising business, and before anyone thinks of expanding, they should look for a few key indicators that their organization is actually ready for that kind of growth.
When the product is ready
So you’ve rolled out the initial version of your product/service, and it is a hit with your core customer base and other early adopters. The question you must ask now is whether it is ready for mainstream public consumption. Trying to expand a business centered around a flawed product can lower the ceiling for your potential market share and sabotage your potential. Analyze your product against the competition, and make absolutely sure that it’s ready to blow everyone else out of the water before you embark on a marketing and hiring blitz.
When you know the market is there
If the growth of your current market is limited, it should only be because of a lack of infrastructure or funding on your part. It is incredibly risky to expand and try to “find” a larger market. Lots of money will be spent on marketing and business development for returns that are unpredictable at best. The market should already be there ahead of time. In cases where your business has a very particular niche, it is similarly dangerous to try and expand beyond that small market. It is one thing to convince customers that you have a great solution to a common problem; it is much harder to convince them that you have a solution to a problem they don’t even think about.
When customer base exceeds customer support
One of the most important elements in maintaining a successful business is making sure fast, quality support is available to every one of your customers. Even the best products can fail if there isn’t sufficient infrastructure in place to help customers who are struggling some element of its use. Word of bad service will spread quickly and will easily undo good publicity from advertising. Resist the urge to keep growing your clientele without investing in more support reps to match.
Most successful leaders meticulously plan the start of their business, and they should always exercise similar caution and reflection when dealing with expansion. The danger is that entrepreneurs will get caught up in the storm of their early success and miss key indications that their company is not yet ready for the big time. Enthusiasm is great, but it is equally important that you maintain a critical eye when looking at your business. A bit of caution now can pay big dividends in the long term and can save your company from burning out early.
Lance | Contributing Writer