If you’ve started a small business, you’re likely enjoying success while simultaneously worrying about the future. For many entrepreneurs, part of that future is growing, whether that means adding new locations or carrying a wider range of products. However, growth isn’t always the best choice for a small business, and even when it is, the right timing is crucial.
Here are five pros and cons to consider before pursuing business growth.
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The Pros of scaling
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1. Growth brings additional revenue
Even if the income you bring in now is enough to pay the bills, you probably would like to see more of a surplus. As long as you continue to do the same thing each day, you’ll likely never grow far beyond your current income. Growing means more customers, more products or more locations, and as a result, more revenue.
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2. You’ll serve a wider customer base
Your loyal customers are great, but you’d probably like to introduce your offerings to new customers. Adding a new storefront— whether brick-and-mortar or e-commerce—or promoting your business in new regions means reaching those new customers.
With a point-of-sale system that supports both brick and mortar and e-commerce, such as QuickBooks Point of Sale, you can easily track new customers coming in and make business decisions based on the figures.
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3. You’ll widen your professional network
Every business owner has a professional network, whether it’s within the local community or through a specific industry. Business development means an introduction into a new network, where you’ll meet professionals with similar concerns and observations. A wider network could also bring professional opportunities, as these new colleagues introduce you to others within their circles.
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4. You’ll grow as an entrepreneur
Entrepreneurship is a career, opening great opportunities for professionals. As you scale, you’ll learn valuable lessons that you’ll learn from and can apply to future efforts. Whether your business thrives or not, those lessons will help you become a better leader and entrepreneur in the long run.
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5. Growth means increased visibility
The dream of many business owners is an acquisition by a much larger corporation. As you find a way to grow your business, it will be more visible, attracting positive attention that could lead to lucrative partnerships, as well as the notice of some of the biggest brands on the market.
While scalable growth is a goal for most businesses, some entrepreneurs and their businesses just aren’t prepared to make the leap. Listed below are a few reasons why scaling might not be the right choice for your business at the present time.
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The cons of scaling
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1. You’ll work longer hours
If, like many entrepreneurs, you struggle to achieve work-life balance, growth could add to that challenge. The bigger your business gets, the longer hours you’ll be forced to put in, even if you hire an entire team to help.
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2. Growth takes time
From the start, you’ve put time and energy into growing your business. When you scale, you’ll need to put in a similar effort to succeed. This won’t happen overnight, so you’ll need to wait patiently to see results from all that hard work.
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3. You’ll alienate existing customers
As you turn your attention to attracting new business, you may have little time for your loyal customers, who have grown accustomed to a certain level of service. If you’re offering a new product line, they may be afraid that the products they love will be lost as a result.
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4. Your current resources aren’t sufficient
The current systems you have in place are designed to support your business as it is now. Your fulfillment processes, software and human resources procedures might not be sufficient for a larger organization. You may need to invest in different software and systems to support your growth.
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5. Failure could break the bank
The biggest risk a business faces when scaling is that it will break the entire business. If your expenses outweigh any new income you’re bringing in, your original business will be required to pay the bill. Some businesses can’t handle this added expense. Without careful business development planning, you may find that too much growth too fast will be more than your budget can handle.
To successfully scale, find a way to grow your business that won’t stretch you beyond your existing resources. Entrepreneurs should always be aware of the risks associated with scaling a small business, so they don’t end up on a path to failure. For more tips on growing your business, see our article on the eight things you must do before scaling a business.
Related: How much is sales tax hitting your bottom line? Find out using our sales tax calculator
https://quickbooks.intuit.com/online/sales-tax/
.This article originally appeared on the QuickBooks Resource Center and was syndicated by MediaFeed.org.
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