Your business is running well, profits are growing, and you feel the urge. You want to push to the next level. How do you know it’s the right time? Check out these five signs it’s time to expand.
Your Finances Are Organized
Your financial records are filed. Your accounting system is set up completely and you know how to use it and you do use it. You know where your money is and you keep track of where it’s going. You make sure your bills get paid on time. You pay invoices before they come due. You negotiate with vendors for the best rates.
You’re either a whiz at accounting yourself, or you’ve hired a company accountant, or you have a great accountant on retainer. You know the numbers, and you watch (and can easily track) your bottom line.
Your Teams Are Strong
No matter how great your product is, and how stellar your customer services is, without a unified and strong team, you don’t have a business ready for growth.
Do team members communicate well? Team meetings run for a purpose, not for socializing. Team members play together nice. Telecommuters check in regularly. In-house people get along. The teams are meshing, and the managers are managing (but not micromanaging).
If you have the right people in the right positions, you have a solid business. If you’re seeing one people problem, it’s this: everyone’s workload is growing, but everyone is working at maximum output level.
Your Profits Are Steady
You have a good profit margin. A track record of profits. Growing profits. And from all financial forecasting and sales figures, you expect to see continued growing profits.
This is the biggest, best, and boldest sign but if the other signs don’t accompany it, don’t lean on profits alone to make your company fit for growth. Profits matter, certainly, but without a strong team or a functioning financial system, profits are not enough.
A diminishing or leveling profit margin doesn’t always mean you are doing something wrong; it could mean, in fact, that growth is necessary. Without growth, your business might not able to meet increasing demand. As a result output will level off, meaning profits will either steady out or, perhaps, slow down as you cease pushing and marketing with the same zeal.
Your Cash Flow Is Positive
Your incoming cash exceeds your outgoing cash, even on the lean days and weeks. You understand your sales cycle, and you have a streamlined payment process. You’re not depending on a haphazard “hope the payments come through before the bills come due” methodology. Instead, you are proactive.
You know how to in get cash in before cash goes out. You see the cycles, the ebbs and flows, that are a natural part of running a business. You’ve learned how to work with those ebbs and flows, not overextend your finances, and not assume a cash-confidence you shouldn’t have.
You keep the whole financial picture in mind, and that allows you to make good decisions and keep your cash flow positive.
Your Funding Is Ready
You know you want to expand, and you have the capital in place (or a sound plan for getting it) to fund that expansion.
Expanding a small business to the next level can often feel like a leap in the dark for small business owners. And it is, if you don’t have adequate funds to finance it. If you’re ready to expand, you will have a phased-out plan for how that expansion should happen. You will have accurate figures for how much each phase will cost. You might even have a timeline in mind for how long each phase should take to complete.
Expanding without funding is like jumping without a parachute. It might be exciting at first, but it’s going to end in disaster.
If you’re looking at your healthy business and seeing these signs, congratulations. You’ve done a stellar job of growing a small business that can move onward and upward. If you’re not quite there yet, now you know what to tackle. See you on the next level.