After pouring time, money and effort into your small business, you are prepared to take your enterprise to the next level. Expanding your business can result in increased profit and bolster your brand reputation.
To scale successfully in your market, avoid these common business growth pitfalls.
Choosing the wrong business entity
The decision to form a corporation, limited liability company, partnership or another type of business influences taxes and operational aspects of your company. When it is time to form a legal business entity, carefully research the benefits and drawbacks of each option. Your choice must depend on the specific organizational and financial characteristics of your business.
Partnering with the wrong firm
Investors and partners often facilitate small business growth and expansion. However, partnering with a person or entity that is not quite the right fit can impact your business. You may find their influence dilutes your strategy, decreases your profit and diverts resources from your goals. Prevent some of these issues with a detailed partnership or investment agreement that clearly establishes expectations for the endeavor.
Avoiding business loans
Financing is essential when you grow your business. Seeking loans and credit lines with favorable terms when your company is at a high point can create a lifeline if business slows. You will have cash on hand to take advantage of new opportunities, a cornerstone of organic entrepreneurial growth.
Using an old business plan
If you developed a business plan when you first started your company, review that document carefully before you expand your business. Update the plan as needed to reflect your new business objectives and goals. If you never had a business plan, put one in place before moving forward. You must submit a business plan to register a legal business entity and access financing.
Mistakes happen when you build a business. However, preparing for and recovering gracefully from these mistakes can help your company survive and thrive after expansion.