How to Tell If Your Business Is Ready For Expansion

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What Is Business Expansion?

Businesses exist to generate profit, but the profit-generating capacity of a business can be limited by its current resources (i.e. space, employees, technology, and so on). As such, it’s necessary to ‘expand’ for a business to generate more profit; business expansion could be done by either adding another store location, hiring more employees for operations, increasing production through technology or manpower, and/or offering new products/or services. A business must expand not only to increase its earning capacity but also to further the brand’s reach and stay competitive.

All About Timing

However, the decision to expand should not be taken lightly as it requires a considerable amount of time, money, effort, and brainstorming. Expanding too soon may result in losses, and expanding too late (although safer) may put your business at risk of being overtaken by competitors that have already expanded. As such, in order to know if it’s the right time to expand, it’s essential for business owners to be way of the following tell-tale signs that the business is ready to expand:

#1 You Can’t Supply the Demand

The most obvious sign that your business is not only thriving but ready to expand is by your lack of capacity to supply your customers’ demand. If you’re barely able to keep your shelves stacked, or if your stock room barely sees any use due to the frequency of purchases from customers and vendors alike, then it may be the right time to increase production capacity through hiring more staff, getting more space, finding more suppliers, and even up-scaling operations. However, it’s important not to confuse temporary spikes in demand either due to a short-term trend or the peak season for the particular product/service.

#2 You’re Getting More Offers

Another big sign from that you’re ready to expand is if there are more vendors, resellers, and investors knocking at your shop’s door to do more business or to offer to invest andhelp you grow your business. When you’ve grown your brand and customers are seeking out your product, expect resellers offering to buy your products in bulk, which can actually be quite convenient for you if you do decide to expand as you can simply focus more on expanding through increasing production capacity instead of opening up another shop to sell products on your own.

#3 Your Sales Are Maxed Out

This could be considered more of a sign that you ‘need’ to expand rather than a sign that you’re ready, but it’s still important to take of it nonetheless. If your cash flow has grown stagnant and can’t seem to increase any further even when maximising production or availability of stocks for sale, it simply means that you’ll be needing to supplement operations so you can produce and/or sell more.

#4 You Have Staff That You Trust

Business team

One indicator and requirement for a stable and thriving business has staff that you can fully trust to keep the operation going. In other words, your business has the manpower that’s both trustworthy and has adequately mastered the business. In contrast, you won’t be able to grow or even stabilise your business if you don’t have staff that you can entrust your business to with minimal supervision.

#5 You’re Already Thinking Of An Expansion Plan

All these signs would be for nought if you’re not ready for the business to expand; in other words, the business is ready to expand only if you are ready to take the next step. The decision to expand can be daunting, and some business owners simply prefer not to expand since they’re contented with the current earning capacity and size (manageability) of the business. However, if you’re already thinking about expansion, but you need more guidance, you can always check your local business plan consultant in London to help you out.


Smart and practical business owners would want to make sure that it’s the right time to expand before doing so, which is why it’s important to take note of these signs to minimise the risk of expanding too soon or too late.

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