Are you an entrepreneur who has stabilized in your small enterprise and now you are considering business growth and expansion? Are you looking at taking your business to a higher level? Could you be considering new locations and territories to operate in? Have you deeply considered some of the critical issues that may affect your planned growth and expansion? Have you discussed your plans with someone else who might offer you good advice? Have you set in place relevant safeguards and controls to ensure your plans are rolled out effectively and efficiently? Of course your enterprise growth and expansion program needs to be successful. Don’t you agree with me?
By the way, business growth and expansion is not something to be taken lightly and for granted. Many enterprises in the world today find themselves exiting the business world in an unplanned, chaotic way, and much earlier than scheduled, simply because of poorly conceived and executed business expansion programs. The somewhat lucky ones find the need to retrace their steps and possibly retract to safety before they can reorganize and make a second attempt at the program. Can you enumerate examples of some of these in your location or country? I think you should, if you are keen on the business world. If you don’t desire to be a part of such failures then please read on. You might get some small piece of advice that might be valuable.
- Profitability of the growth and expansion program. There are entrepreneurs who just wake up dreaming about business growth and expansion and proceed to implementation stage without thinking about the economic sense of the program. You are in business for profit my friend, unless you have some objectives that are superior to this, but as far as I know about 99% of enterprises aim at profit. Have you put in black and white your financial considerations and analysis? Do they make sense to you? Or someone just told you to expand, and you blindly follow suit.
- Financing the expansion. What about the financial aspects? Are they well taken care of? If you are borrowing money for the program, do you have in place sufficient safeguards to pay back the money whatever direction the expansion program takes? Does the cost of the financing still fit into your return on investment projections? I guess you know that some business growth and expansion programs can really consume finances, and you need to properly prepare for this. Don’t you think so? You will not appear smart when you rush to the financiers at the last minute when you are in serious crisis. The earlier you consider and prepare – the better.
- Manpower required for the expansion. Now, the human capital aspect I think outweighs a number of the considerations I have written about here. Candidly, human capital manages all the resources and anything wrong with human capital has very adverse consequences on enterprise operations. Get this right Mr. Entrepreneur; you are not going to be shuttling up and down every other day to utilize your knowledge and skill in the various locations you operate in. You are not going to spend sleepless nights because your enterprise is growing and you have people who can’t do their work. You have to be smart. Your growth and expansion program must take into account the extra human capital you need in terms of number, quality, skills set etc. If you don’t do this, you might end up working so hard that you begin forgetting the names of your staffs and even children!
- Controlling the business. Many enterprises fail in this aspect when expanding operations. All of a sudden nobody knows whether all revenues are being accounted for or not, whether stocks are intact or not, etc. The enterprise might start bleeding money and other resources and the owners and directors simply wonder what is happening, until possibly a consultant is hired to come and ‘discover’ the problem. For goodness sake, you should hire a consultant for better reasons other than to find out what is in your house! Isn’t it? Control of resources in the business, efficiency and effectiveness issues, financial planning and treasury management, procurement, investments etc. in your business should be well taken care even when your business is growing or expanding. If you have limited knowledge about controlling a business, simply get enlightened. Learn, and learn. Hire right. Never jump into the enterprise expansion bonanza when you are in your raw form! Be smart!
- Maintaining consistency of delivering value, customer satisfaction, quality etc. Again, let’s take it that you have succeeded in building a name. You create and deliver good value consistently to the market and your clients or customers are satisfied. With rapid growth and expansion the operating scenario changes quite a bit. While expanding your operations, have you taken into account the prime need to continue delivering value and quality to the satisfaction of your new clients and also the old ones? Are you sure? Don’t degenerate into mediocre performance simply because you are growing your enterprises, and then you start giving lame excuses to the market, repeating yourself over and over again why things are not running as they used to. Do you get what I mean? Come on, let your business challenges be your challenges. You chose to expand. Don’t transfer your expansion problems to the market. OK?
- Managing diversity and remoteness. Oh yes, business growth and expansion come with quite some issues, including diversity and remoteness. You have got to plan for this and be ready to handle the pertinent issues accordingly. It becomes more interesting when you start crossing national borders. You need to be comfortable with having employees who speak a language you hardly have any clue about. You need to be comfortable with having staffs you never see face to face for months. You need to be comfortable with laws and regulations in new territories; even those you find a bit silly or ridiculous. It is a diverse world Mr. Entrepreneur. So, while planning for your enterprise growth and expansion, never forget these issues.
I think it’s time to get going. Please, try and be a smart and organized entrepreneur! Don’t wake up with wild expansion programs and proceed to implement them without a second and third thought. The market out there will test your plans, and you might be found lacking. Rather keep your enterprise weaknesses indoors (as you work to overcome them) than throwing them in the open for everyone to see. Isn’t it a better choice? You can choose to be wise, or alternatively move around with a feet of clay.
The Wise Entrepreneur