Expanding any business in this uncertain economy is a big risk. Many long established businesses, mostly retailers, are closing their doors after decades of success. Several businesses expand too fast, or in ways that may not make sense, only to have to scale back to survive in a year or two. Expanding the business wisely and slowly improves the chances of sustainable success.
A New Location
Some business owners expand by opening a second location in a neighboring town. Sometimes that works and sometimes that does not. Do some research and plan accordingly when considering a new location. In addition to double staffing, two rental buildings, acquiring additional equipment and higher operating costs, other expenses have to be factored into the equation.
Setting up technology in the new place means more devices, new copiers, and new phone systems. Remember to add in furniture costs and decor. Consider travel time between the two locations, and time to get supplies needed for jobs in areas outside of the immediate area. It may be smarter to stay in the one location and offer new services to a wider area.
Adding a department or new division to the business is often a wise way to expand. Loyal customers will still patronize the business and may purchase more products of contract new services. Attracting new customers can be accomplished with a grand opening for the new section. Some examples of how successful this type of expansion include department stores that began selling groceries and lumberyards that added renovation services.
Many businesses with physical locations have also launched websites designed for E commerce. More and more people are shopping on the internet. Instead of struggling to compete with technology, embrace it and let customers know they can order their favorite items from the comfort of their own home.
Bank loans incur interest rates and may be difficult to get for expansion. The risks are high, so some banks are not approving loans for this purpose. Factoring provides an easy and fast solution with no upfront costs. Factoring companies purchase business invoices for cash. They pay a percentage of the face value and take their fee when the invoice is paid in full. Those interested in expanding the business, or alleviating cash flow issues, can click here to explore factoring options.