A businessman is drawing Next Step concept with arrows on blackboard.

Is Your Business Ready to Take the Next Step?

Good news for business owners: BUSINESS IS BOOMING. A large percentage of family-owned firms are confident that they will continue to grow revenue in the next five years. Now, this is a major leap compared to six years ago – this is the time when only half of family-owned businesses grew sales. However, many companies today have transitioned from ‘merely getting’ by to ‘being stable’. As a business owner, one of the most important questions you will ever ask is: Is my business ready to take the next step?
Expanding Your Business
Business, in its simplest form, is a risk to take. Expanding your business is a completely different matter – it is similar to starting a new business altogether. You have to reassess if the market for your products and services is changing. If it is, then this might be the perfect time for you to expand the scope of your business with new offerings. If you have noticed, companies that have been successful in pursuing a particular strategy often repurpose their business in such a way that realigns with the consumers’ preferences. Take for example Apple – this company now sells phones, music, movies, and watches, among others. It was originally a computer company, but in order to survive, it had to reinvent itself as something more. Doing this often requires rearranging your finances as well, so before you veer too far from your core business, consider these things:
Can I afford to pay for R&D?
Research and development (R&D) is a required investment especially when you are eyeing an expansion. This might include everything from product development to market research, depending on your line of business. A bank will not finance R&D, but you can opt to seek investment through a debt or equity. This is another risk to take but if you are planning on coming up with a new product, this will be worth it.
Is my business competent enough?
Having new products and services could also require new knowledge and skills – you cannot come up with something entirely new based on something that is entirely old. These new knowledge and skills can be possessed by both new and old employees, given that you give your old employees proper training to help them improve their knowledge and skills. You have to be careful when hiring new employees who possess the right knowledge and skills your new product or service requires because your decision might greatly affect not only the cost of expansion but your options for funding it as well.
What are the other resources required?
In addition to human resources, having a new product or service might also require new or extra equipment, vendors, real estate and working capital. Does your new product or service need a new type of office or a certain type of technology? Are there additional legal requirements that will require outside legal help? These are some of the things that are important to think about before expanding your business.