Small business ownership is a journey that is full of unknowns, especially in the beginning. It is exciting to own your own business, but it can also be challenging knowing that all the decisions fall on you. One of the biggest decisions you’ll face as a small business owner happens when you ask yourself, “When is the right time to expand my business?” Here are four signs that your small business might be in a good place to expand.

1. You have outgrown your space, or you can’t keep up with demand

So you’re bursting at the seams at your current location and you are so busy that you can’t keep up with your customer demands. That’s great news! But that’s also a clear sign it is time to expand your business.

If the demand for your product and service exceeds what you can produce, it is definitely time to expand. There is clearly a target market for what you have to offer. If your customer base is clamoring for more, why not expand your business and make the changes necessary to meet the demand?

Outgrowing your space is also a clear sign it is time to expand your small business. Whether you and a business partner have outgrown working from your dining room table, or you own a bustling coffee shop with lines that stretch out around the block, you are clearly ready to expand to a space or location that better fits your needs.

2. Your business requires a skill set that you don’t have

When you are just starting out, it is on you to handle all the details of managing your own business. Regardless of what type of business you run, product you create, or service you offer, you are also in charge of your own marketing, accounting, customer service, and more. As your business grows, you may find that you no longer have the skill set to take your small business to the next level. If your business is doing well enough that you have the budget to hire staff or outsource work to experts, then it might be a good time to expand.

If you think you can get more leverage from better social media marketing campaigns, then expand your staff to include someone to do just that. Or if you see a need in the market that you’d like to support, but don’t have the skill set for, bring on a new partner who does. It’s hard to let go of the reins, but bringing in an expert who can fill a need is a great way to expand your business.

3. You recognize the need to diversify 

Let’s say that your business is going well, but you have noticed a plateau. You have a steady stream of customers, but they are the same customers coming in over and over. This is one sign you may need to diversify your product or service offerings in order to get in front of a new audience. That’s not to say that there is anything wrong with having repeat customers; the fact that you have loyal customers is great news for your growing business. But if you’ve hit the ceiling of how far you can grow your business with your current product and your current customers, then diversifying can be a great way to expand your business. You’ll have a steady cash flow from your existing products and services that can give you the financial stability and the confidence to branch out and try something new. 

On the flip side, you may be offering dozens of products and services, but only one of them is profitable. You’ve got a golden egg, but you’re not sure if that is sustainable. Take a step back and consider how you might scale down or eliminate underperforming products and services. Also, take time to consider that another reason you might need to diversify is that you recognize that of all the services and products you are offering, only one of them is making your “golden egg” successful and think about how you might take what you’ve learned to create more successful products. Diversifying strategically can ensure you aren’t counting on just one thing to keep your business afloat.

4. Your business is in a good place financially

Maybe none of the above applies to you, but your small business is in a great place financially. You have a positive cash flow, your customer base is happy, and you are comfortable. That’s great! But that might also be the nudge you need to try something new. If your business is doing well, it could be an excellent opportunity to think about a new product you’ve been meaning to test out, or offer an additional service that could expand your customer reach. Take small steps to test out growth opportunities, knowing your business is financially sound.

When you are ready to expand your business, Sound Accounts can scale up our services to fit your needs. We support small businesses at every stage of growth. Contact us to find out more about how we can support your growing business.

For helpful info on expanding your business, check out our frequently asked questions and answers below. 

FAQ’s

What are some signs that it’s time to expand my business?

If you have grown out of your workspace, are unable to keep up with product demand, or want to diversify your offerings, then it might be a good time to expand. If your business is in a financially healthy place and you want to grow, this is also a good sign that it is time to expand.

What are some things I should consider when I’m preparing to expand my business?

Some things you should consider are: Is my business financially stable? Is there a market for the product or service I want to expand to? Do I have a physical need to get into a bigger space? How will I define success as I expand my business?

What are some questions I should ask before I expand my business?

If you are thinking about expanding your business, here are some questions to ask yourself: Are you growing out of your current work space or business location? Are you unable to keep up with demand? Is there a skill set that you don’t have, one that could help your business grow? Do you want or need to diversify your products and services?