Expanding your business requires a lot of planning, and not just in regards to creating the perfect marketing campaign, securing the perfect space for a second location, or finding the perfect candidates for your new team. These are actually among the last things to worry about if you intend to take on a higher level of demand. First, you must re-evaluate the current state of your business, particularly your financial health and ability to meet your customers’ needs.
With expansion comes pressure, and refusing to figure out how you’ll deal with it could cost you your entire business. Being realistic about your future, on the other hand, often leads to success time and time again.
Here are 3 things you must ask yourself before expanding your business:
1. Are you meeting demand without trouble?
You can’t take on more work unless you are absolutely certain that you aren’t struggling to complete the work you already have. If you are always able to pay your bills, get your work done on time and leave customers satisfied, expansion is most certainly a viable option. You have clearly met your initial goal of running a successful business and can therefore move on to a new, increasingly ambitious goal.
It’s important to remember that a second location or bigger team isn’t a solution for mental and financial pressure. An excessive amount of either of these two problems should instead be alleviated by additional resources, which could include small business funding from a company like United Capital Source. Maybe your real problem is that your operational funding cannot withstand the costs of serving your customers at all times throughout the year. We specialize in providing working capital loans, business lines of credit, accounts receivable loans and more to companies that experience cyclical dips in cash flow, often beyond their control.
After all, a great way to determine whether or not you are ready for expansion is to take on debt for a short period and see if your demand is sufficient enough to help you pay it off.
2. Can you afford the investment you have in mind?
Any worthwhile investment has additional costs. If you wish to open a new location, you’re going to need a new team to run that new location as well as a marketing campaign geared towards residents of that community. The same concept applies to larger projects: the longer it takes to get the work done, the more expenses you rack up. And even if your business is highly profitable, it’s not like that money is just constantly flowing into your bank account every week.
This is where small business funding comes into the picture. Working capital loans, merchant cash advances and accounts receivable factoring allow small businesses to cover those additional costs while they wait the bulk of their profits to come in. These three business funding programs can help you cover regular business expenses and/or stabilize your budget during periods when cash flow is known to get a little shaky so you can devote more attention to executing your investment. Unlike banks and other traditional sources of business funding, United Capital Source can arrange your terms so that your repayment doesn’t affect your cash flow negatively.
3. What are your competitors doing?
You and your competitors likely share a target demographic and have probably utilized similar strategies to get customers in the door. The success or failure of their investments should be heeded when you are forming your plan for expansion. For example, if your competitors have begun offering additional services, you can learn what kind of customers took them up on these services and then tailor your advertisements to them. You could also learn how long it takes them to perform this service, how long it takes them to get rid of certain amounts of inventory, or how long it took their marketing campaign to take effect.
If you choose United Capital Source to finance your expansion, we will get you your funding at the exact time when it is most advantageous and adjust your payments to account for any significant expenses that might arise along the way. With a merchant cash advance or accounts receivable loan, you’d be able to buy inventory or increase staff when your competitors are still recovering from the slow season, keep prices low when your competitors are raising them, or recruit the right amount of staff to get your work done on time, every time.
It Couldn’t Be Any Easier With UCS!
Attracting customers is harder when you are competing against established businesses. You might need to pounce on certain investments the moment they become necessary, and United Capital Source can accomplish this by distributing funding in a matter of days and adjusting payments to account for sudden expenses that might occur along the way. Working with us doesn’t involve tedious back-and-forth communication, mountains of paperwork, or even a perfect credit history. Carrying out game-changing investments is difficult enough, so you can leave it to us to keep your business healthy in the meantime!