Expansion is great but can you afford it?

Expansion is considered the natural route for most businesses to take. As the business grows and becomes more successful it attracts more customers, and it needs more staff to service the customers and larger premises to house the staff. But expansion can be a real trap if you haven’t got the money behind you to fuel the expansion.

You can easily get into financial trouble. Expansion is an expensive exercise and it takes a lot of time, energy and focus from the day-to-day running of the core business. By all means expand but make sure you talk to your financial advisers and banker before you do—no matter how small your business is. Grow to a plan and control the expenditure so your long-term growth will be far more successful. If you don’t want to grow your business any larger that is fine.

Resist the growth and focus on making the business the size you want it to be and make it magnificent. There is a lot to be said for a business that is controlled in size and run extremely well. Fine tune everything and get the formula right—someday you might want to expand and it is far easier to grow a successful, profitable, well-run business than it is to expand one that is just barely kept under control.

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