If you’ve reached this stage, then a huge congratulations is in order. After all, you’ve navigated through all of the high-profile challenges that tend to trip up businesses in those early years and ultimately cause them to fail.
Unfortunately, the journey has only just begun. When you get to the point of expansion, things take a complicated turn. There is no easy way to scale a business and you should keep some key considerations in mind before you progress. Let’s take a detailed look at some of these important considerations through today’s piece.
Do you have the physical space?
First and foremost, there are some obvious practicalities to consider. You might want to expand, but whether or not your existing premises permit this is another matter.
Of course, this is going to vary depending on the trade in which you operate in. For example, if you are in an industry which requires warehouse space, you might consider certain Safestore locations as you try and keep up with the new, increased capacity.
The message we are trying to give is that you can’t hope for the best in these situations, you need to be prepared or run the risk of having “homeless stock”.
The tax-factor
Again, circumstances will dictate this next consideration. If you are looking to expand into other countries, there are going to be obvious tax repercussions.
If, on the other hand, you operate as a sole trader and are looking to expand it might mean progressing into a different tax bracket. Regardless, make sure you think about this point carefully.
The dreaded C-word
Cash flow. If reports are to be believed, this is one of the biggest enemies of the modern-day business.
Sure, it’s all well and good that you are expanding, but you have to make sure that your finances are going to allow for this.
In other words, you might start to make a lot of sales, but how are you going to fund this initially? This tends to only affect those businesses who sell on credit, and don’t necessarily get paid at the point of sale. If you fall into this category, this is the biggest issue you need to be aware of.
The true cost of hiring new staff
Finally, this last point is something else that is often misunderstood.
Sure, you might be aware that you have to pay for new staff to cope with your expansion. However, it’s at this point that most people only take into account the salary that these individuals are going to be paid.
In other words, they don’t think about the other costs that enter the picture. You might be advertising a job for £20,000 per annum, but when you take into account tax, insurance and even HR fees, things suddenly start to get a lot more expensive. This is another example where you must know your numbers inside-out before going ahead with your expansion.
