We've all heard stories about businesses that started out strong but then grew too quickly and suddenly failed. Some entrepreneurs might be scared off by these worrying tales and be less likely to attempt to grow their businesses. It's always hard to know when the right time is to grow; you don’t want to push too hard too quickly, but you also don't want to wait too long. So let's consider which signs to look out for to help you figure out when it’s the right time to take a leap and expand your business.
1. Demand exceeds supply
When customers want more than they can actually get from you, this is a sure sign that it may be time to grow or diversify. This may take the form of fresh goods selling out quicker than you can get them in from suppliers. If you are a service-based business, it may look like you are over-booked or have a very long waiting list of clients in need of your service. These are all good signs because it means people value your offering and will be ready and waiting once you can supply them with your service/items.
2. Customers keep asking for a product or service you don't have
If customers need more from you, they will let you know in various ways. Sometimes, customers will tell you directly that they want more goods, services, or locations. They may travel from further places, they may directly ask you to source it, or they could place backorders. If customers keep asking for something and you don't have it, this could be a sign that you need to expand and begin offering it. You can also use polls to find out this kind of information. The important thing is to listen out for this info and seek it out actively.
3. People don't try to haggle over your prices
If customers rarely try to negotiate with you on price, it could mean that you have a lot of room to grow and make more money. If you've been able to make money while delivering, it's possible that you have a cost or technology advantage over your competitors that could be scaled. Pricing is a major touch point when it comes to growing your business so try and understand how much room there is in order to keep your offering so that you are cost effective, competitive but still profitable.
4. You're Making Progress
If you're not sure if you're making progress, ask yourself: Does your business make you feel like you're pushing a rock up or down a hill? The reason this is such an important thing to think about is because of movement. When you have movement, it's easier to grow your business. If you don't have it, it's hard to grow. You want your business to feel challenging but still dynamic. Use this kind of inertia to ascertain if you need to challenge yourself more and whether the ”uphill” feeling is because your structures and product offerings need to change in order to make things run more smoothly.
5. With your current sales and infrastructure, you're making money
Ask yourself if the current operational infrastructure and process is profitable with current sales? If the answer is yes, it could mean that your system and process can grow along with the top line. Now you know how to scale this model and apply to it a wider offering. Here you need to copy what already works and offer it in more locations, or with a new product line or complimentary service.
The bottom line
One of the biggest challenges for small business owners is understanding when to stay put or when to grow. This is a tricky decision that relies on a sharp understanding of your customers, your processes, as well as your gut feel. By keeping an eye on these five signs above, you will be better equipped to make a call on whether or not it’s time to take the plunge. And remember that when you have made a call and want to take things to the next level, you will need funding. That’s where Merchant Capital comes in. So for access to quick working capital in the next 48 hours, contact Merchant Capital today.