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Expanding your business - five key considerations

POSTED: 2nd September 2014
IN: Guides
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With the UK economy returning to growth and corporate prospects looking up, the thoughts of many business owners and directors will be turning to expansion.

With the UK economy returning to growth and corporate prospects looking up, the thoughts of many business owners and directors will be turning to expansion.undefined

Is this the right time to expand? Can we secure the necessary finance to enable growth? What are our future ambitions? These are just a few of the questions that will be going through the minds of company decision makers as they evaluate their prospects for development.

If you are currently giving some serious thought to expanding your enterprise, read on to find out more about some of the key issues you should be taking into account.

Timing

Is the time right for my business to expand? This is arguably the first and most important question that owners, directors and managers should be asking themselves when making plans for growth.

Before investing valuable time, money and resources in your development plan, you want to be sure that the conditions are right within your sector, and across the economy as a whole, for your expansion to be a success.

Overall, Britain is currently offering good conditions for business expansion, with the economy back on an even keel and confidence increasing among consumers and companies alike. However, it is always important to do some thorough research on your specific industry, as positive macroeconomic factors do not provide a guarantee of success in all sectors.

Investment

Some businesses that have been particularly successful might have the financial resources to self-fund their expansion, but many will need to secure some sort of outside investment.

For companies hoping to secure external financing, one of the fundamental steps is to have a rigorous and tailored business plan that shows potential funding providers your projections for performance and profit. A comprehensive and carefully thought out plan will give possible financial backers peace of mind that their money will be used responsibly, with good prospects for investment returns.

Before pitching for investment, make absolutely sure that you have a clear idea of key things like how much money you need, how you plan to use it and what contingency plans you have should things not go as you hope. Also, it is important for all key decision makers and stakeholders in the business to get together beforehand to decide how much, if any, equity the company is willing to give away to secure an investment.

Staffing

All businesses, even those that make widespread use of automated processes and technology, are reliant on people to succeed.

Your workforce is arguably your most important asset, so make sure you have the requisite personnel and talent within your organisation to enable a successful expansion.

Will it be necessary to bring in workers with specific expertise to deal with new challenges as your operation grows? If your plans include expansion into overseas markets, do you need to hire people with foreign language skills or other relevant expertise and experience in those markets?

Taking on full-time staff represents a significant outlay for employers, so consider whether it would be more efficient to bring in freelancers, contract workers or consultants for short-term projects.

Diversification

A product or service offering that has brought you success in the past might not have the legs to keep your business running smoothly as it expands, so think about opportunities for diversification.

Launching new services or entering unfamiliar markets can be a daunting step, but it can also open up fresh opportunities and avenues for expansion that could take your organisation to the next level.

There is always a balance to be struck when it comes to diversification - between continuing to succeed at the things you do well and trying your hand at something new. Launching complementary products or services is a relatively safe and comfortable first step that could lay the groundwork for some exciting new prospects.

Future goals

Having clear goals and benchmarks for success needs to be a key part of your expansion plan, so dedicate time to thinking about where you want your company to be in a few years' time.

Setting objectives will provide a stronger sense of structure and direction, delivering reassurance and satisfaction when you reach your targets and motivation to make changes when you fall short.

Having a clear target in mind will also make it easier to identify the necessary systems and infrastructure you need in place to facilitate growth. If one of your aims is to increase the number of visitors to your website by 20 per cent, for instance, it might become clear that your servers and software need to be upgraded to handle this rise in traffic.

Expansion can be a challenging process for businesses, but with sufficient planning and organisation, it can be a hugely exciting time that puts you on the road to greater success and profitability.

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