There comes a time, usually after the startup chaos subsides, when small business owners feel like they have a good handle on their companies. When you reach this stage and sales are climbing, you may wonder if it's time to open a new business location. Here are 10 signs your business may be ripe for expansion:
1. Your First Location Is a Well-Oiled Machine
You have systems in place, everyone's using them and sales are trending upward. You're confident you can use this as a template for additional locations.
2. Your First Location Is Ahead of Its Targets
Your original location exceeded all of its targets early and is still running smoothly, and you think there's room for growth at a new business location.
3. You Can't Keep Up With Demand
Not only is your first location beating its numbers, but you also have lines out the door. Customers can't buy fast enough, and you're routinely running out of inventory.
4. Your Employees at Your First Location Are Superstars
Your employees are top performers who can train others on how to do their jobs well. You think you could convince some to move to a second location to help train new employees there.
5. Cash Flow Is Positive and Increasing
You're doing better than breaking even and the financials grow stronger every month. If you're still working toward positive cash flow at your first site, however, you're probably not ready for another location.
6. You're Starting to Turn Business Away Because You Don't Have Capacity
Maybe your dry cleaning business is stuffed to the gills, or your day care is booked solid with a waiting list. If you can't increase capacity at your first location, a second may be the solution.
7. Customers Are Looking for a Business Like Yours in Their ZIP Code
You're spending less time and money on marketing than you expected because customers are knocking down your door. You know the demand is there, and customers have confirmed it.
8. You're a Market Leader With First-Mover Advantage
Your business is the first of its kind in your region, giving you the upper hand. You may not be able to sustain that position, however, unless you keep up with demand.
9. Complaints Are Trickling in From Customers About Your Inability to Meet Their Needs
Maybe brides are complaining that you're not available to photograph their weddings in two years because you're already booked. Or your gluten-free pizza delivery service takes more than an hour to fulfill orders. A new business location could help.
10. You Worry the Competition May Beat You to It
Your type of business is rising in popularity, and you believe the trend is here to stay. Reacting to the competition isn't smart, but working to maintain your market leadership is. Opening a new location could do just that.
If any of these signs sound familiar, congratulations. Expansion is key to creating a profitable enterprise.
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