Expanding a small business can be risky. This is especially true if the small business grows too fast and is underfunded while trying to do so.
To expand properly, careful planning is required. First, you have to have enough working capital to grow, and it's always a good idea to have a contingency plan in place.
Here are 10 planning steps from Ferrari Energy that any small business can take to prepare for a significant expansion.
1. Have a Mission Statement
A mission statement might sound minor, but a good one can serve as a guiding light for your company. As you start to grow, it's easy to lose sight of what you're in it for. A solid mission statement will help keep you focused on your goals, so things don't venture too far off as you grow.
2. Create a Plan
Any significant expansion requires a detailed plan for the short, medium, and long term. Create a one-year, five-year, and 10-year plan for where you want to be, then fill in the tasks that will help you reach each of those points. Of course, you can update the goals as the years progress, but make sure you have the plan in place at all times.
3. Secure the Proper Funding
Most small businesses fail because they don't have the necessary funding. This proves especially true during significant expansions. You should have more than you think you need in cash and credit so you can sustain down periods or unforeseen expenses.
4. Hire the Right Support Staff
Having the right support staff in place will be essential as you embark on a major business expansion. You won't be able to do everything yourself, and you'll need to have people you can trust helping you. It's vital to hire the right people as you plan for an expansion so you can focus on everything you need to do.
5. Invest in Company Culture
If you want employees to work hard for you and stay with you as you grow, you need to create a solid company culture. This should be in place before the expansion begins. Any expansion will require an adjustment period. If you have a good company culture in place, your employees are likely to stick it out.
6. Get the Tools You Need
When businesses expand, they often need improved infrastructure to help them along the way. Many times, this means new software and programs that can handle more clientele. Ferrari Energy says you should get this in place before the expansion, so you and your team know how to use it.
7. Build Brand Awareness
Marketing and advertising will be a big part of your expansion. So, before you pump a lot of money and effort into getting bigger, start small by building brand awareness. Luckily, this is simpler to do today than ever. Build out your website and social media pages, and start with free word-of-mouth campaigns.
8. Track Your Performance
It'll be hard to truly know how your expansion is going if you don't track your success. Use advanced analytics tools so you can objectively see what's working and what's not. This will allow you to adjust marketing campaigns, outreach, and other functions on the fly.
9. Reward Current Customers
When companies get bigger, they tend to focus on new customers. In the process, those customers who have been around since the beginning tend to feel forgotten and slighted. Make sure you're not doing this, and consider rewarding your longest-standing customers when planning an expansion. This is important, as retaining existing customers is much less expensive than attracting new ones.
10. Don't Forget Where You Came From
Business expansions can be exciting. It can be easy to get swept up in where you're going and lose sight of where you came from. Never forget your roots and the people who have been with you from the start. This will keep you humble and grounded as things start to change.