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Getting a business off the ground can be an incredible challenge, but your work is far from over after a few successful years. Helping your company scale presents a set of unique challenges, and it can be tough to prioritize growth when you’re already dealing with so much in your existing business.
As you start handling more and more work, you’ll eventually need to consider adding to your current company. Many entrepreneurs aren’t totally sure how to get funding for a small business, so the idea of growing and developing often gets pushed off. However, expanding is one of the best things you can do once you have financing secured. The following tips will help you approach the expansion process and grow your business effectively.
1. Build Through Partnerships
Putting your own investment forward for a new location or new employees can be tough in the early stages of growth. Using partnerships for growth is a great way to minimize risk while maximizing the potential reward.
Creating effective partnerships requires a commitment to networking and a drive to build personal connections with people in other businesses and fields. Suggesting a new partnership is much easier and more likely to succeed if you’re on good terms with the partner company.
Partnering with businesses in other areas also opens up opportunities to diversify and bring your brand to new markets. Small business partnerships require open communication and sharing as well as close cooperation throughout the process.
2. Consider Your Competitors
Regardless of what industry you’re working in, looking at the ways similar companies have succeeded can help you create a successful roadmap for your own business. While no two small businesses are exactly alike, analyzing the competition makes it easy to avoid the mistakes other companies have made.
3. Prioritize Location
Location is crucial for any business, especially for manufacturing companies that are working with a large number of vendors and clients. This needs to be taken into account when planning any expansion in order to ensure that the new location works with your business practices.
Opening a new location requires allocating resources and disrupting your existing processes, so it may be better to grow the capacity of your current location rather than adding an entirely new one. Other considerations including taxes and zoning issues should also be taken into account.
4. Preparing a New Location
If you do end up deciding to pursue a second location for your business, you’ll need to make sure the potential sites will be ready. You may not be able to make modifications in a rented space, so consider buying the property if it would require adjustment to fit your needs.
Similarly, older facilities may not be outfitted with everything a modern business needs, and the costs of updating an outdated space may not be worth the potential benefits. These seemingly minor details could end up becoming massive headaches later on, so you should keep them in mind from the beginning of the process.
5. Staffing and Educational Opportunities
Other potential benefits of a new location include access to a new pool of labor and connections with local universities, which can provide additional training and research opportunities.
On the other hand, if adequately skilled staff are hard to find outside your local area, this could be a challenge when you’re looking to branch out to a new location. Finding an area with top-tier talent is vital to ensuring the short- and long-term success of a second location.
6. Consider Manufacturing Factoring
If your business is in the early stages of rapid growth and you’re looking for short-term expansion, factoring could be a great way to improve your cash flow and free up the money you need to invest in a new location.
Manufacturing factoring essentially involves selling off your current invoices for a small fee. Growing small businesses often have more expenses than income, and factoring allows them to cash in their accounts receivable and use that money now rather than later.
Factoring also takes the collection process out of your hands and opens up resources to focus on the business itself. Depending on the factoring rate, your current cash flow, and your potential for growth, factoring could be the perfect way to help your business expand.
Managing a rapidly growing manufacturing company can feel hectic and overwhelming, and it’s often tough to find time to plan expansion when things are already so busy. These tips will help you thoughtfully approach the possibility of growth and make an informed decision for your business.