You’ve had a few great years, the cash cow is nice and fat and your clients think you are the best thing since sliced bread! It’s time for the big league … multiplication is the name of the game and you are ready to play!
Or are you? One of the greatest mistakes many businesses make is knowing when and, equally importantly, if they should expand. Expansion often seems like the next logical step for a business that is consistently producing a healthy profit.
This is exactly what I faced when I expanded my Australian business to the U.S 6 years ago.
As we all know, when the foundations of a company are sound, the wonderful military adage; Proper preparation prevents poor performance,” has never been as true as when deciding to embark on business expansion. The due diligence process must be followed.
Big isn’t always better, and if your motivation for going big is simply to make more money, then maybe you need to rethink your choices. We can sometimes be fooled into thinking that if we duplicate what we currently have, we will duplicate our profits. But if the right preparations are not put in place and the timing is not right, the opposite can occur.
Before you embark on the journey of duplication or multiplication, here are a few Moments of Truth you may need to discuss with yourself and those who will be affected. Remember: whatever you start with is exactly what will be duplicated. “Average duplicates just as quickly as excellence!”
1. Can you duplicate your business or is it identity based? A duplicable business does not require a specific person, like its owner or CEO, for its multiplication and financial success.
2. Systems. As boring as it sounds, get your systems, policies and procedures in place before an expansion and make sure they are easily accessible, workable and in a user friendly format. One of the greatest freedoms my business gained was systematizing everything and creating processes. The business went from being overly dependent on a few people who possessed all the knowledge of the business, to being empowered by the actual systems, and running like a well-oiled machine. With usual staff turnover, employees didn’t take the IP with them. On the contrary, they added to it during their tenure.
3. Human Resources. If a necessary resource for your expansion requires people, be very clear about what lies ahead. Human issues can be fraught with danger unless you can answer the who, what, when, how much and how many questions accurately regarding future staff. Be particular about properly staffing up and don’t rush the hiring process as your company’s future relies on it.
4. Financials and Due Diligence. Ask yourself if you have sufficient funds to support business expansion and prepare a business plan and a feasibility study before making a decision.
One of the most empowering parts of applying for my U.S. work visa was conducting a thorough business feasibility study, not just for the new business here, but also for the Australian company. At first, I felt mentally paralyzed because after 21 years the business just “functioned” by itself. Yes, we had budgets, and team meetings, and marketing projections, but I had never really considered whether the transcontinental expansion was truly viable, whether I was ready with resources and if this was the right time.
While this intensive business review and preparation experience was painful at the start, it ended up being refreshingly energizing and demonstrating the viability and success of my proposed U.S. expansion. You owe it to yourself and your business to understand the opportunities and the risks, and believe without a doubt, that your expansion plans are rock solid before deciding to move ahead.
So, all the preparations are in place and you’re ready for the big move. Yet, your heart is pounding so hard that your chest feels like it’s about to explode. Haven’t you done all the research? Don’t all the numbers add up? So what stops us from taking the next and final step?
5. Stop FEAR in it’s tracks. We all have a little voice in our head (Pitman) reminding us of all the reasons why we will fail; the current climate isn’t good so we should be cutting back, not expanding. “Why can’t we just be happy with what we’re doing? Why do we need to create more headaches?” Pitman lives in the Pit of Misery so of course he’s going to create doubt and insecurity and try to convince you not to take that next step, despite the evidence to the contrary. Longevity in business depends in part on change, development and expansion.
I believe there are only two times in life, now and too late!
You have done the work, you put in the research time, you refined your craft/product and now your time has come. You are ready … so, what are you waiting for? Set your fears aside. Courage only turns up after you have faced the fear.
You know deep down whether this is the right decision. If it is, you are ready to go to market, because your time has come.
Make it now, and not too late!