Is Your Startup Ready to Grow? 5 Signs It’s Time to Expand
Starting a new business often brings uncertainty. How will you connect with your ideal customers? Can your staff help you grow? Few things match the thrill of seeing your startup take off. As you gain more customers and start making money, you begin to think about what’s next. If you’re like me, you’ll ask yourself: should we grow bigger? Growing your startup needs careful thought.
Expanding too soon has been shown to be the top reason startups fail, with growth mistakes playing a role in up to 70 percent of all business shutdowns. Successfully growing a business comes with many hurdles. If you’re not careful, you might make money mistakes overestimate some sales, hire the wrong team members, or even let your customer service slip. How can you tell if your startup is prepared to expand? Here are some indicators that will show you when it’s time to grow.
You Have a Strong Core Team
Your startup’s strength depends on the people who run it. If your current staff is overworked, their talent or passion for your business idea won’t matter. A Gallup survey found “workplace stress” to be the main cause of employee unhappiness. Too much pressure and stress will burn out your key team members.
Even worse, they won’t stay with your company for the long term. Bringing in new talent will help ease workloads so everyone can do their best work.
A Solid Foundation
Many startups fail because they focus too much on growth and forget the basics of long-term success. Even simple things, like defining your target market and value proposition can help you create a proven concept. You should show your product or service can sell before you try to grow. You need the right setup in your company to keep things in order (this matters a lot for handling money).
Make sure your mission statement and company values are set in stone! Don’t wait until you’re growing to tackle these issues. Set up a solid foundation, and you’ll save time and energy as your business expands.
Positive Cash Flow
Turning a profit is great, but having a positive cash flow is even better. Cash flow shows how much money comes in and goes out of your business — not just what clients owe you, but the actual cash in your company’s bank account. As you grow, your costs will go up often before you see more money coming in.
Look at your current cash situation to guess future income and expenses. This helps you prepare for unexpected problems so your growth plans don’t lead to bankruptcy.
You’re Saying No to Potential Customers
When you first launch a business, you can often handle most customer projects on your own. But as more customers start coming your way, you might face a common problem: how to deal with all the work. This situation gives you two main choices—either turn down new customers or get extra help to meet the growing demand.
Saying no to new business chances isn’t the best move when you’ve got a steady flow of customers showing there’s a real need in the market. This demand hints that your business idea has legs and that customers value the quality of your work.
Instead of letting productivity hold things back, it’s key to spot when you need to grow. No matter what business you’re in, steady and rising demand is one of the best signs that it’s time to get bigger when that demand is more than what you can handle right now.
You’ve Completed Your Legal Research
While staying profitable is a top concern, those thinking about growing their business might forget to look into the legal side of things. But this isn’t something you should ignore.
The rules and regulations that come with expanding your business are just as crucial as making sure you can keep making money. If you’re considering financing options or loans to support your growth, it’s essential to review the FAQs of reputed lending companies to understand the terms and conditions that could impact your expansion plans.
When you do your homework, you can be sure you won’t break any local or federal laws that could (and maybe forever) stop your growth.
Planning for What’s Ahead
It’s easy to want to grow your startup after you’ve had your first taste of success. But I’ve watched too many friends fail because they tried to expand before they were prepared.
Sometimes, the old saying “slow and steady wins the race” really does hold true. When you take time to build the right base for your startup, you’ll create a structure that helps you boost your strengths and tackle your weaknesses. By making sure your startup is ready to grow, you’ll see long-term success as you build your business.
