Business expansion is one of the key goals of any entrepreneur as this signals growth and that the business is on the right track. A need to purchase additional equipment, renovate your establishment or open a new branch can be due to certain events or milestones such as a surge in sales and more client demand.
You always have to remember that before undertaking a business expansion, you need to make a thorough assessment and analysis if it is the best route to take. A business expansion entails capital which can hurt your cash flow so it has to be studied thoroughly.
It is, therefore, good to know when the right time to expand is to ensure the continuous growth of your business. Here are a few signs that it is time to grow your operations:
- There’s an increased demand for your products and services.
One way of knowing if you already need to expand your business is if demand for your products or services is high enough that you’re having trouble fulfilling orders. For you to maintain the quality and timeliness in the delivery of your products and services, your staff‘s quality of work, and your loyal customers, you will need to increase your capacity such as getting additional equipment or more employees.
You just need to ensure that you are not only having a temporary boost in sales. Your sales chart should show a steady monthly increase for one good year or more.
2. Your customers want proximity and longer hours of service.
Another sign would be when you get a lot of requests from your customers to extend business hours or to put up a branch in their area. If you are considering opening at a new location, you should first research on the market if there is indeed sales for you in that area. On the other hand, to determine if you need to extend business hours, do a survey among your customers to know if there is a substantial number of them who will do business with you during that period.
- You’re running out of space.
Whatever and wherever your business is, you obviously need enough room to operate efficiently and effectively. And if the number of customers visiting your business has boomed or you’ve increased your staff, you will definitely need to either create more space or move to another nearby place to accommodate your increasing number of patrons.
Just make sure that your growth is consistent and not just an irregular boost. Expand gradually to avoid investing in a space that’s too large or expensive for your business to sustain.
- Business is profitable and has a steady cash flow.
A business expansion requires a solid foundation of available capital. This will not only help you qualify for loans but it will also provide you a cushion of operating funds until you begin to see profits from the expansion, which could take several months or more.
You also need to account for the unexpected. The general consensus is that your initial business should be running profitably for several years before you should even consider an expansion. Check out your financial performance over the last three years. A steady growth in your finances will allow you to proceed with your expansion plans.
Take a step back and assess your cash flow, your team, and your customer base to determine if it’s the right time to make that move.
If you are ready to take that next step, let us help get you started with our PSBank Business Loans.
Whether it will be used to increase your working capital, acquire a property, purchase additional equipment or expand your square footage, the following PSBank Business Loans are a perfect fit for your expansion needs.
The PSBank SME Business Credit Line is a revolving credit line that you can use anytime by simply issuing a check, eliminating the need to get bank approval every time a need arises.
On the other hand, the PSBank Credit Line provides you easy access to funds via Promissory Note.
Meanwhile, the PSBank SME Term Loan which comes with a Prime Rebate feature lets you earn rebates in the form of “interest discounts” on any advance or excess payments made on the loan. Over time, you can use the rebates to lower the loan principal, shorten the loan term, or even both.
For inquiries on PSBank Business Loans, visit your nearest PSBank branch or call our 24/7 Customer Experience Hotline at (02)845-8888.
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