Owning your own business is as challenging as it is rewarding. Every day brings with it a new problem to solve, a new learning experience, and a new achievement. As your business grows, one particularly complicated challenge you’ll face is the decision of whether or not it’s time to expand, and the process of determining the best way to go about it.
The first step in expansion is making sure that it’s the right move at the right time. Here are a few indicators that it might be time to grow:
1. Your customer base is making it obvious they want more.
Maybe more and more people are coming into the shop or blowing up your inbox than ever before. Maybe your customer base is expanding geographically and they’re wishing they didn’t have to drive 20, 40, or 60 miles to give you their business. They’re asking for more features, more products, more options, and they’re lining up to give you their money. That’s a good sign that it’s time.
2. Business has been steady for a while.
A little pop in business, even several months long, isn’t enough to justify a major expansion. However, if things have been steady and rising consistently for a nice chunk of time, say three years or so, it could be proof that your business model will continue to work at the next level and in new markets. Keep an eye on your industry as a whole, as well. If you’re selling beepers or VHS rewinders, maybe don’t take out a loan.
3. You’re already operating like a smoothly-oiled machine.
Does your staff have their act together enough to handle the new influx of work and challenges? Do you have good operational systems in place to train new employees who will be representing your brand at your new location? If you’re struggling to keep organized or to keep your staff in line, an expansion is likely to make those areas worse. If things are airtight, though, your chances of the expansion being a success increase.
4. Your current size is working against you.
Do you have to walk down the halls sideways because of all the stacked boxes of inventory? Are your lead times six months when they should be six weeks (or are you having to turn people away altogether)? Are you working 25 hours a day, 8 days a week? It could be time to take a big growth step.
Let’s say your business checks each of those boxes and it’s absolutely time for a big expansion. The U.S. Small Business Administration (SBA) has many loans, grants, and programs available to help make the growth of your business a reality, without the headache.
There are multiple loan and grant options available to you through the SBA, and a trusted banking professional can help you figure out the path that perfectly suits you and your team.
“The Small Business Administration has several loan programs available to assist businesses. They include programs for real estate or large equipment purchases that provide up to 20 years fixed rate financing and programs to help with other asset purchases, working capital, or lines of credit for assisting the company’s management of cash flow. Whether it is a start-up business, an existing business looking to restructure debts, or a business looking to grow to the next level, the SBA provides credit enhancements to allow a bank to offer a more flexible structure and sometimes allow a bank to assist a business that does not meet conventional underwriting requirements.”
EVP Business Banking, Fortifi Bank
“Owning a small business comes with an endless variety of obstacles, and a growing business can be among the most challenging. Knowing how to finance an expansion can be confusing and intimidating. However, the SBA offers a variety of programs which can make that expansion a reality. SBA loans are “value added”, which means that in many cases they can result in longer loan terms, more lenient advances on collateral, or smaller down-payments than conventional bank financing. Fortifi Bank is an SBA Preferred Lender and can make the process seamless for your business.”
SVP Business Banking, Fortifi Bank
There are many paths to success for your small business, and on each one you’ll encounter a unique set of obstacles and challenges. An expansion is a big step down that path, and is certain to be intimidating for any small business owner. But whatever your goals, the people of Fortifi Bank are in your corner, ready to equip you with the tools you need to make your business thrive.