You have completed your business plan, found investors and have been running your own, small business for the last five years. Business is good, and it is now time to expand. It is the natural, next step. You realize that your business is hitting a plateau and instead of staying with the status quo you want it to grow. You want to increase your small business – growth, advantage, staff. As with anything, for every action there is a reaction. Therefore, growing your business will require you to invest in your business.
Unless you can find someone else to fund your expansion, you can expect to see a decrease in your personal profit. Small business – growth, advantage, staff costs are gaining economies of scale It will take capital to expand your business. Expanding your business may not be a visual change, like increasing your business location square footage. The changes you make may just be expanding your product line. However, no matter which way you expand your business your monthly expenditures will increase. On the flip side, because you have expanded the foundation of your business you will be able to reap a few of the benefits. For example, if you increased your product line you will probably qualify for a bulk discount. This will lower the cost per item, which will increase your profitability.
This is known as the virtuous circle, and will provide you with certain advantages. Growing your business will widen the market share gap between you and your competition. Your goal will be to increase your market share while decreasing their market share. This may also deter new businesses from opening in your area. Increasing your market share will also increase your customer loyalty. This is a feature that most small businesses thrive off of. They rely on repeat business. Customers will continue to visit the same establish as long as they are satisfied with the service they are receiving. Retaining the same reliable key staff members is an essential part of the small business – growth, advantage, staff plan. Keeping your employees interested in their job by providing them with a since of recognition, and installing business challenges to keep them on their toes will provide each employee with a since of accomplish. They will be more likely to stay versus leaving for greener pastures.
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