Most entrepreneurs have their hearts set on expansion. Standing still is not really an option as there is always another hill to climb. The vision is rarely a single entity but a small little empire. Our eyes are always looking for new markets and new opportunities. In business we need to be quick to act as to not miss out on an opportunity. However, if we jump to quick our business that we worked so hard to build can crumble to the ground.
Photo by: KCNewman Photography
Expansion within a business is a time of vulnerability and if we don’t adjust properly we can kill what use to be successful. It is not a time to fear but it is a point that needs great clarity and forward thinking. If you are contemplating expansion make sure you can answer these 5 questions.
1. How will your role change? Different stages require a different owner. In the beginning you need to do everything. As you grow your role changes and morphs. The more you micromanage the greater lid you put on your company. You will need to change and adapt as your company matures. You need to write down how your role changes. It is important to remind yourself what you do but also what you don’t spend your time doing.
2. Have you replaced yourself? The reason you want to write out the change in role is so that you can create new job descriptions for staff members. Being able to give both tasks and key results areas is crucial so that you are able to inspect what you expect. As a business owner it is your job to replace and train yourself out of a job. Replace yourself before expansion to make the transition smoother.
3. What if you fail? Failure or at least less than desirable results may happen. You need to be prepared for an action plan of failure. Writing down both a time and willingness for loss is crucial for an entrepreneur. Often when something is failing a business hangs on too long and damage themselves to a point of no return. Writing down both a pivot and time table will help eliminate emotional decisions.
4. What if you succeed? There are two types of problems in business. Not enough business and too much business. If new business is not handled properly the customer may never try you again. If this expansion blows the roof off of your company make sure that you can handle it. If you want your company to thrive it heavily depends on your ability to take in and take care of new clients. Plan for success.
5. How is your cash flow and savings? Cash is king and often it is not treated as such. Knowing your numbers is the lifeblood of your business. With expansion you require more money to keep your doors open. You need to make sure that your emergency fund is nice and healthy. Know what parts of your company are producing profit and what parts are pulling you down. Be vigilant with your cash flow, the bigger you become the easier it is to be sloppy with your money.
Answer these five questions to avoid business failure during expansion. As the great John Wooden said, “Be quick, but don’t hurry.” Move quickly but don’t rush the process and your expansion will be the dream you desire not a nightmare.
Are you looking at expansion?