Business is good. So good, in fact, that you’re contemplating opening another location. Or, maybe you’re staying put but thinking about greatly expanding inventory (or remodeling or expanding your existing brick-and-mortar location).
While expanding your business may seem an obvious next move, doing so without a strategy may doom your success.
Think of it this way: when you go away on an expensive family vacation, chances are you budget ahead of time. You likely have a rough idea of what the trip will cost. But if you’re a prudent budgeter, you tack on a couple extra grand for unforeseen expenses. Use this analogy as your blueprint for growth/expansion success. Make sure you have enough capital to fuel the growth. And then make sure you have a little extra on top of that.
But having enough liquidity to fund going to the next level isn’t all there is to ensure success….
Negotiate Better Terms from Your Vendors
If you haven’t done so lately, negotiating better terms from your suppliers or vendors can help free up some extra cash flow to make expanding easier.
Speaking of vendors, do you have enough customers to state the case to your vendors that it’s in their best interest to negotiate terms? For example, if you own a coffee shop, and you can show your supply vendors that you increased your customer base by, say 25% from a year ago, two things will be accomplished. First, you may be able to negotiate better terms based on buying more inventory. And second, being able to show that your customer base has expanded is an important metric in figuring out if it’s time to expand.
Even if you have a history of bad credit, it may still be possible to get a loan to fund expansion (read how here). Showing lenders the all-crucial metric of increased customers is paramount if you need outside funding.
Having a state of the art point of sale (POS) system is vital for easily accessing and analyzing business metrics such as customer acquisition.
Hire a Growth Czar
It doesn’t matter if you a Masters degree in Business Administration from Wharton. Congrats if you’ve been named by your hometown’s monthly glossy magazine as entrepreneur of the year. But these accolades won’t ensure your business’ success in its growth/expansion phase.
In order to ensure that growth will be successful, you need highly-capable employees. If your existing manager is Generation Z or close to it, he or she may not have the experience necessary to help you get your business to the next level; perhaps you’ll need to hire outside help.
Maybe you can temporarily hire someone who has a proven track record of overseeing expansion. While you might already have a business manager in place, he or she may be spread too thin as a result of both overseeing the existing business and the expansion. Therefore, task someone with the sole role of being the growth czar.
Create a Blueprint for Growth Success
You likely created a business plan to get your current operation off the ground and running. Do the same for the growth/expansion phase. Make sure every department and/or employee is fully aware of what their role will be in playing a part of the growth success. And to reiterate, make sure your business is flush with enough cash. In fact, map out in your growth business plan all your expenses. Make sure you have at least a few months worth of positive cash flow in case it takes longer than expected to reap revenue from your efforts.
Contact us today to learn how a best in class Point of Sale (POS) System can help contribute to your business expansion.