Taking Your Small Business To The Next Level

 

Entrepreneurship continues to grow rampantly around the world and particularly in the United States of America. One of its key states, California continues to be a vibrant entrepreneurial hub. By 2016, California had over 3.8 million small businesses,  employing over 49 percent of California’s workforce. The business life cycle tells us that every business eventually reaches a crossroads. The time comes where small businesses must decide whether and when to take the big leap and step up their business. If you are a small business owner, here are some signs that may be telling you it is time to consider a step forward.

Signs It Is Time To Expand

Your resource capacity is stretched thin. This may apply to your machinery and production capacity or even to the human resources in your small business. Perhaps labor is being overworked and demand is growing. Fears are rising about meeting the order quantities and as your customer base grows, so should your business.

Speaking of demand, it may be time to expand, if your market or industry is growing,

 Even if you choose to secure external finance for your expansion plans, you want a steady positive cash flow to be assured you can afford the repayments and cost of finance. A steady stream also indicates your business is relatively stable; one year of great profits does not necessarily mean it is a good idea to expand. Be sure to look at your income over at least three years.

Now that you have an idea of the indicators that it is time to expand your business, how can you actually expand? There are many avenues and they do not all have to be drastic and overwhelming. Here are three ways and how to finance it.

Expand Your Capacity

One of the more common ways to step up your business is to increase your resources. This can mean several things including securing a larger business premises, expanding your workforce or upgrading your machinery.This can be tricky however and requires due diligence and research. Be sure to establish that the conditions that are conducive to your expanded capacity are present.

These options for growth can be substantial and require financing. If you are looking to secure a better property or to move your small business from your home into its first office, you will be looking at substantial expenditure. Your options for purchase can be either leasing or choosing to purchase the building. As with your home, mortgages or business loans may be needed to complete your purchase. You’ll need to calculate how much you can borrow as a commercial mortgage 

hen planning your expansion, which will give you an idea of the monthly payments your business will need to cover each month. This is where your income stream comes in useful.

Don’t Go It Alone

Many small businesses have the misconception that they need to build their business alone. This is not true. Exploring agreements and partnerships with other businesses both in your industry and in complementary industries can be beneficial for your future in many ways. A great benefit of this option of growth is the reduced scale of financing needed. Having a partner business splits the costs attached to the expansion. Having partnerships with more visible businesses will not only get your product out there but also boosts your own visibility and brand at the same time.

Go Digital

Keeping up with the digital and technological shift is quickly becoming essential to any business wanting increased visibility. Having a digital presence comes with many benefits and minimal costs compared to other options. This is a great way to drive demand for your products and boost your brand name. By employing an interactive website and social media tools, your can get your customer base growing in no time. It does not require a dedicated office space either, with many startups and home businesses utilized online selling platforms such as Etsy to get their business started or to go national. Financing for digital expansions tend to be less and can be supported by retained profits. If you are seeking external finance, a marketing and business expansion plan is important for your interview.