When you own and manage a start-up, life can often seem to be full of worries, uncertainties and insecurities. Even when business is thriving, the thoughts of what the future will hold is constantly looming over you.
It’s no big secret that the vast majority of start-ups fail, and half of them do so within the first five years of trading. Of course, making important business decisions in the shadow of this reality can be extremely daunting.
Many start-up entrepreneurs dream of growing their business in order to build a more stable foundation so they can do away with fears and insecurities of this kind once and for all. However, prudent and sensible entrepreneurs are all too aware that a business is at greatest risk of failing when it decides to expand, hence why so many start-up owners are trapped in this seemingly never-ending thought cycle when it comes to the question of expansion.
Of course, the truth is that a time does always come in the life of a business where the best and most sensible option is, indeed, to scale, but determining whether or not your start-up has reached this point can be the source of many headaches and internal conflicts.
If you’re wondering whether or not it’s time to scale your business and take it to the next level, then here are a couple of tell-tale signs that your business is ready for expansion:
- You’ve had to turn down possible business opportunities
- Office Space
- You’ve surpassed all your business goals
- You’re experiencing solid cash flow and repeat business
- Scale up when you feel ready
Your customer base will be the support and income on which your expansion will be funded so it’s important to realise when that base is growing beyond your current capabilities.
If you’ve had to turn down customers due to a lack of inventory, lack of manpower or a lack of time to meet their demands, it’s time to think about scaling your business so that you don’t have to turn down any future growth opportunities.
Have you been growing your team recently and now realise that the number of people you’ve hired are outgrowing your office space? If you’ve answered yes then perhaps it’s time to shop around for a new space. There are many types of offices to choose from. The one you choose depends on what your current needs are, but if your team is growing at a rapid pace then a serviced office may be the best option. These kinds of offices come fully fitted and are equipped with all the services you need in a functioning office.
All business owners have both long and short-term goals that they strive towards. It’s therefore essential to take the time to evaluate these goals as realising your goals and not moving forward will leave your business in a state of stagnation with no prospect of any real growth.
Whilst being profitable isn’t enough of a reason for a business to scale, having sturdy cash flow and repeat business can help you to accurately forecast how your business will perform in a month, 12 months and even 5 years time.
Top tip! It’s a good idea to calculate the ratio between your best performing month and your worst performing month in the past 24 months and, if the difference isn’t significant, it may be time to take the plunge and grow those numbers.
Finally, scaling up is a big decision to make and it should only be made when you feel ready. Doing so otherwise may create unnecessary risk. Although risk is an inevitable part of all businesses, minimising this risk should be a priority.