Nearly everyone who launches a company or joins one at a leadership level has one question on his or her mind: How and when can I grow or expand the company and use that growth to increase revenue. It’s the COO who looks for new market opportunities, the entrepreneur who realizes that there’s an increased need for their company’s products or services and the newly recruited sales leader who is determined to build on previous successes and take the organization to the next level.
Growth is always good if a company has, or can get, the infrastructure to support it. But along the way, there’s another factor that needs to be considered — and that’s timing. How do you know when the time is right to expand your operations? It’s going to require an investment of resources.
Many business leaders agree that there are a number of tell-tale signs that your company might be ready to move to the next level. You just need to know what to look for.
Five of these signs are:
Your industry or market is expanding.
It’s always good to be in the right place at the right time. That’s where business leader George Scorsis found himself when he was looking for new opportunities. After 15 years of success in the energy drink industry, he realized that marijuana was being legalized in Canada and knew that the Canadian cannabis industry was primed for growth. Since signing on to serve as executive chairman of WeedMD, an Ontario company that produces and distributes medical and recreational cannabis products, Scorsis has significantly expanded the company’s operations.
“There is little to no doubt that the cannabis industry is growing and sales have increased significantly in the last few years. Legalization is going global and now is the time for cannabis players to expand their businesses,” adds George Scorsis.
“A company that serves a market in expansion, and that is part of a thriving industry, has high potential for successful scale-up,” writes Susan Burns, a lawyer and global development consultant. “You must not only analyze your industry, but also your chances to adapt and evolve when necessary.” She adds that, “If you’re catering to a growing market, the odds are in your favor.”
You’re having a difficult time meeting customer demand.
Business is good. Maybe too good. It’s so busy that you have employees working round-the-clock to meet demand. This, says the editorial team at Square, a point-of-sale and payment processing company, might be the obvious sign that you’re ready for growth. “But make sure to track the numbers,” the team advises on its website, “because having a crazy-good month isn’t the same as sustained demand, especially if it coincides with the holidays or a special event.” In other words, if your company uses a POS system that also includes analytics, you’ll be able to monitor historic sales by month, which will help you learn if current demand is likely to be ongoing over the long term.
Your team is in place and ready to take the company further.
If you’ve assembled what you believe to be a “dream team” of managers and employees who are ready, willing and able to grow the company, it might be a good time to start considering business expansion. When a company first launches, the founder is often enthusiastic and has his hands in a lot of pies. But then, reality sets in. You realize that you can’t do everything. There just aren’t enough hours in the day. But if you have a solid team in place, the potential for growth could be significant.
“As you have the ability to grow, the first thing you have to do is prepare people (inside the company), or hire from the outside, to take those roles and responsibilities,” says Giancarlo Di Vece, CEO and president of Vancouver, Washington-based IT consulting and software engineering firm Unosquare. He believes the success of employees is an important measure of success.
You can afford to grow.
As with most things in business, virtually every business initiative eventually comes down to money. Do you have enough revenue, profits, cash flow, and financing to expand the company? It’s going to take a good chunk of change to get you through the ramp-up phase of your expansion, which, according to Michael Jones, senior editor at Funding Circle, which provides small business loans, “usually means unforeseen costs and investments that won’t see returns for a long time. You need to be profitable for a few years and have sufficient cash flow to carry your business through a successful expansion, whether or not you receive financing.”
Your operational and marketing strategies are exceeding expectations.
If you’re experiencing considerable success now, it can be a strong sign that how you run your company and grow your customer following are leading you in the direction of expansion. As is often the case, winning strategies can provide road maps to success and continued profitability.