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