2. Do you have too much money?
This doesn’t sound like a problem. Actually, it can be. Your business profits may flow into your personal bank account all you want. But as a general rule, your business accounts should have enough cash on hand to cover about 3 to 6 months’ worth of operating expenses.
If you have more money than that lying around, you may be starving your business of the capital it needs to grow.1 Consider investing in ads, better equipment, more real estate, or talented new hires.
3. Do you have the right systems in place?
If you’ve been running a small business long enough to begin thinking about expansion, you know how hard it can be to create the right systems and processes. Sometimes these logistics take up your whole day.
To expand, you’ll probably need accounting and payroll software. Other software packages track productivity and manage projects; still others manage the flow of digital content from conception to final delivery.
Whether it’s a computer, an oven, or a lathe, you and your team will need training on how to use it. As revenue grows, what’s your process for handling cash?
Your systems will evolve as your business grows. Get things in order now so your systems grow with you.
4. Do you need something you don’t have?
Often when we start a small business, we don’t know everything we’ll need. We may know the product inside and out, but our technology or accounting systems could be improved. Maybe at first we can only afford a small space or used equipment.
If we’re lucky, our business becomes so popular that it can’t grow any more until we remove these early obstacles. Hiring top talent, or someone whose expertise complements our weakness, is often a good place to start. New machines will be more efficient and cost less in the long run.
If you keep saying to yourself, “I could do a lot better if I only had … ” you’re probably ready to go and get it.
5. Is your industry growing?
A rising tide lifts all boats. Or most of them, anyway. Are you noticing a lot of new companies selling the same things as you? Are they busy? Are you getting emails advertising new associations and conferences serving your industry?
You may be in a good position to expand with the rest of them, especially if you tailor your offerings to a part of your growing market that no one else sees.
Choosing the resources you need
When you’re contemplating the next step, look at the resources you have on hand – or close by. Find ways to reinvest some of your cash – if possible. Look for ways to move expenses by cutting unnecessary costs, and free up money to put toward your company’s bright future. Also, consider your funding options – like a long-term loan for big investments, for example, or short-term funding, like QuickBooks Capital, for quicker-turnaround projects.