As keen as you are to reward yourself after a successful first year in business, you can’t waste any time looking towards the future. Even if it might feel a little early to grow your company now, it’s still worth considering what you could do when the time comes. But, how can business owners determine whether their company is capable and ready to grow?

Too many businesses have tried to grow too quickly and ended up closing down sooner than expected. If you want to avoid that risk, consider these signs your business is capable of growth.

Your Business Is Consistent

Every business owner wants consistency, yet this is hard to come by, especially during your early years when you’re still building a reputation and carving out your niche. However, if you make plenty of sales each month and have a steady stream of loyal customers, you can consider your business moderately consistent. While there are other factors involved, consistency is a fantastic sign that your company could be capable of growth with the right approach as long as you don’t try to go too big too quickly.

You’re Making Good Profits

Another sign is that you are making good profits. The average small business will struggle to make profits in the early years and even if you do, there may not be great profits. Still, if you’ve managed to maintain your customer base and attract new customers while staying within your budget, you increase your chances of making good profits. The magic number to look for is a 10% net profit margin, as anything less may be unsustainable.

You’re Having to Turn Customers Away

You want to serve as many customers as possible but can’t achieve this with your current scale. If you need to turn customers away, you already know the demand is there, which is a good sign that you’re ready to grow your business. However, remember that these customers may only require your services once. Don’t expect everyone to become a regular and long-term customer that will propel your business to new heights.

You’re Enjoying Great Social Media Metrics

Another way to determine if your business is ready for growth is to look at key metrics. One area that all businesses should focus on is the online reaction to your brand. By tracking social media metrics, you can get a good idea about how engaged your target audience is in your company, or at least the industry. If you can determine there is interest, you have evidence that the customers are there. All that’s left to do is find out how to bring these customers to your business through social media campaigns and marketing.

You Get Questions About Serving New Markets

Successful businesses can consider entering new markets once they are established. If you receive messages from potential customers all over the country (or even the world), it could be time to reap the benefits of a new market by exploring your options. Entering new markets enables you to expand your reach and sell your product or service to a brand-new audience. But, remember that various markets have different cultures and needs, so you should offer products that align with these needs to get the most out of it.

You Are Speaking to Investors

Ambitious investors are always looking for companies to support and help them grow. If you feel like you don’t have the capital to grow the business yourself, you can get a business valuation and speak to investors to see how they can help you. You will need to outline a business plan and prove you’re in this for the long run so investors believe in you, which will increase your chances of growing your business and achieving the goals you’ve laid out thus far.

The Industry Is Thriving

A thriving industry is another sign that your business could excel from growth. They say a rising tide lifts all ships, so if the industry as a whole is doing well, there’s no reason why your business can’t benefit from it, too. Still, a thriving industry also means more competition, so you may need to work twice as hard to ensure your business stands out from the crowd to give you the tools and support to grow successfully.

Ready for Growth

Growing your business can be risky, but it’s a process you need to undertake if you want to expand your services and reach new markets. While there are risks involved, looking for these signs can help ensure you are confident about your company’s potential and help you take the right steps towards growth.

Greg Kononenko
Greg Kononenko

My name is Greg Kononenko and I am a full-time online blogger and owner of Dad's Hustle. I'm a dad, and my passion is to help other mums and dads to start their own "hustle" and improve the financial future of their families.

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