You should always look for ways to improve your business, but there is such a thing as growing too soon or too quickly. Take American Apparel, for example, which opened nearly 300 stores just six years after its launch, then fell deeply in debt, filed for bankruptcy, and shut down its stores, becoming an online-only retailer. The lesson here? Before you invest too much time, energy and other resources into your business, make sure it’s the right time to grow. Here are some signs.
If your market or industry is poised for growth, it might be time to grow your business along with it. According to a report from financial services company Fundera, some of the fastest growing industries in the United States right now are real estate, hospitality and consumer retail. Jim Patterson, the managing editor of The Kiplinger Letter, shares a handful of other industries he expects to grow quite a bit over the next five years, including cannabis, online grocery delivery and health care.
Make sure you’re financially prepared for growth. Before you take any major steps, you should have a few years of steady revenue and a steady flow of new customers. “A consistently growing base of people who want to be customers means the demand is there,” said Paco de Leon of The Hell Yeah Group, a financial firm for creative entrepreneurs. “And steady profits means you’ll be able to grow sustainably, and you’re not putting the cart before the horse.”
If you have more business than you can handle, it’s probably time to grow. Of course, sudden spikes in sales aren’t necessarily an indicator that demand is high — this could just be a fluke. So make sure you consistently have more demand than you can supply. Do they want different products that you could be offering? Interview your customers. Survey them about satisfaction, interest in new products and overall feedback about your business. Then look for patterns in the responses you get. If your customers want more of your product, faster delivery or additional services, that’s a good sign.
Decided it’s time to take the next step? Here are a few strategies you could try.
