Knowing When to Expand Your Small Business
Knowing when to expand your business, or make your first hire other than yourself, is really a difficult place to be in for most small business owners. Perhaps you are at a place in your business where you can barely keep up with your customer demand. Or maybe you continue taking on customers but have a very slow turnover rate because you are swamped with all the customers you keep accepting. Or maybe you are turning away business because you can no longer handle the volume and those potential customers are going to the competition. Whatever the scenario is, it’s never an easy decision to expand.
If you are a small business owner working solo, it is especially intimidating knowing when to make the jump and make your first hire. It is certainly not a risk-free move to hire a new employee (whether it is your 20th or your 1st) even if you have business beating down your door. Taking on another employee means taking on more overhead- namely financial.
Maybe you know it is time to hire some help but you feel as though you cannot afford another employee at the moment, so you don’t hire. In the mean time, you find yourself swamped and turning away business. You find soon enough that your business is at a stand still- you’re bringing in money, but haven’t grown or don’t see the numbers climbing like you want them to. The only way you are going to overcome this is if you take the risk and add an employee to your team. Maybe you can’t afford them at the moment, but look at it this way- maybe you make some personal sacrifices to make it work. If there is high demand for your market, you will soon be able to add more volume, more customers, more jobs to your business and quickly make up for the loss you undertook at the start of your new hire.
With these ideas in mind, maybe you are still nervous about expanding. I would then have you answer these questions-
- Are your potential customers who contact you but are turned away going to the competition?
- Is your competition growing and expanding as well (i.e. is the market for your business hot?)
- Does your business have no real competition and still have a high demand?
- If you project how many more customers you would be able to take on with a new employee and calculate your revenue, would you end up in the green?
If your answer is yes to these questions, you are probably ready to expand. If you are still unsure, consider hiring a part-time virtual assistant. VA’s are certainly an alternative solution to your expansion problem worth considering. Depending on the work you have in mind, they have very little overhead and come at a reasonable rate. As with all things, do your research, plan well, and happy expanding!