Facing Your Firms Growth PainsJuly 10, 2018
Two Common Mistakes In Scaling Your Business
So your business is doing good. While you want to sit back and enjoy its current state, you are actually itching to expand it and keep up with the demand of your growing client base. Just the thought of it excites you. However, while expanding brings certain advantages it can also be very challenging.
It would be wise to stay away from these two common mistakes when scaling your business.
Mistake #1: Expanding for the sake of expanding
Grabing the growth opportunities for your business may be the most natural thing to do but you have to assess what is your real aim for expanding. Expanding can be advantageous to your business as it gives access to banks and financial institutions offering financing at a lower cost. It provides an avenue to introduce new product lines and reaching a wider range of customers. Expanding could mean getting on board more qualified staff who can be possible assets to your organization.
Despite the many advantages, expanding may not be the best move for you unless you’re 100% convinced that increasing profits is the main goal. You can gain a significant market share by expanding but without increasing your profits, it would all be pointless.
Mistake # 2: Expanding without planning
They say if you fail to plan, then you plan to fail. Make sure you do your sales forecast and market research before expanding. Consider factors like fluctuations of the business cycle, the current state of the industry you belong to, the local economy where your business is located. Also keep in mind that if you are moving in a different location, it may mean losing your current local customers. Advertising cost may go up in order to get fresh clients in your new location.
Would scaling your business require financing? Are there qualified people in your staff that are capable of handling the expansion? Are you ready for the additional duties and responsibilities that expansion brings? Before you expand, make sure to avoid the mistakes mentioned above and take into account that scaling your business will demand more of your time that may have a significant impact on your personal life unless you get the help of people who can take care of systemizing, streamlining and scaling the business for you.