| Every small business will eventually feel the | | | | cases. |
| heat and find the need for expansion. The | | | | |
| time will come when the small plans that | | | | 1. Increasing personnel doesn't require |
| worked when first starting the business may | | | | increased funds. Payroll can be taken care |
| no longer be sufficient. | | | | of from the increased revenue from the |
| | | | business. |
| Understanding What to Expand | | | | |
| | | | 2. Automated machinery calls for extra skills |
| The buzzword 'business expansion' may be | | | | for operating it. Ideally, you would train a |
| catchy to outsiders but as a business owner | | | | few of your best people to operate the |
| you need to understand precisely what to | | | | machines or hire extra personnel. Normally, |
| expand in order that the scarce resources | | | | the company that was used to procure the |
| that you do have are optimized. | | | | machinery will also provide training as |
| | | | needed. Y |
| 1. You feel increasing personnel helps | | | | |
| increase production to meet growing demand. | | | | 3. Opening localized service points need not |
| | | | be by buying or renting real estate unless |
| 2. Maximized labor can't cope with the market | | | | you have explored the possibility of |
| demand and you have identified that | | | | outsourcing. This is where having a website |
| automating business operations would both | | | | comes in handy. The Internet is by far the |
| reduce costs and increase efficiency. | | | | best way to reach overseas clients. Also, |
| | | | using this method, your business will be open |
| 3. International demand cannot be met as the | | | | 24/7. |
| business is operating now. Diverse markets | | | | |
| need localized service points. | | | | 4. Constructing or leasing a new warehouse |
| | | | will increase your asset base but not without |
| 4. You need to keep more inventory on hand | | | | a huge investment. You should critically |
| because price fluctuations don't allow | | | | analyze if you can get by with the existing |
| just-in-time procurement. You are | | | | space, maximized by using retractable storage |
| contemplating using a warehouse facility for | | | | racks, thereby creating more space within |
| storage. | | | | your existing warehouse. |
| | | | |
| 5. Your supply chain is hard pressed; it is | | | | 5. There is no substitute for augmenting |
| difficult to manage with the existing | | | | logistics. Your options are either |
| logistics operation. | | | | contracting out the supply chain or managing |
| | | | logistics yourself. |
| The need for expansion can be a combination | | | | |
| of above and you know well that you can | | | | Knowing when and how to expand your business |
| hardly push it any further without expanding. | | | | is essential for continued success. If you |
| | | | find that you are struggling to keep up with |
| Planning Your Business Expansion | | | | demand, and certain operations are |
| | | | continually pressed for time, then expansion |
| Having identified the exact nature of the | | | | is an option that you will want to carefully |
| expansion needed, the next step is careful | | | | consider. |
| planning. Let's examine each of the above | | | | |