Level Up Your Small Business?

The most successful small-business owners are not the ones who only have great original ideas. They are successful because they also know how to read the current and future marketplace and can quickly adapt to changes they see on the horizon. The ability to navigate through economic uncertainty is what gives these business owners their competitive edge. Want to move confidently into expansion? Here are some practical pro tips to assess the financial and operational strengths of your business:

• Consider expansion when you want to strengthen your company. If you are at the point where it is hard to keep up with demand, it’s time to think about developing the business. By adding a new product or opening a new location, the potential to increase profit is certainly there. Remember, too, that this may require additional expenses in the form of hiring more staff, modifying current infrastructure or contracting new vendors to keep up with the demand.
• Customer retention is a key element in any business. It costs between five and 25 times more to acquire a new customer than to retain a current one. If you see the customer retention numbers trending upward, it’s a safe bet that your repeat customers will continue to rely on your business even as you experience growing pains. This loyal customer base will continue to be part of your long-range plans. Make sure you understand what it is that keeps them coming back and continue to meet their expectations. Seek qualitative feedback from this group through social media or online surveys and take appropriate actions when needed.
• A few good months of profit is not enough of an indicator to suggest taking your business in another direction. A great winter holiday season may not be truly representative of your business’s financial health. Showing consistent year-over-year revenue growth for several years may indicate that demand is exceeding your capacity to effectively serve your customers. This could be the time to expand your business.
• Look to your staff for clues on how efficiently your business is running. If your staff is grumbling about keeping up even though you are hiring more staff, you may want to expand to alleviate some of the stress. If your physical space is busting at the seams with inventory and staff, consider moving to a larger facility or expanding your current one.
• Keep a very close watch on market and industry news to know what is going on before you make a move. Is there evidence to suggest that the market is saturated, or is there room for your business to move in a different direction to serve a growing market segment?
• Evaluate your financial resources to help you fund the expansion. If you think you may need additional financial help, take the time to talk to your business banker. They are there to advise you through your expansion plans with financial options. Be proactive in speaking with a financial professional to know what the pitfalls may be before you come up against them in real time.

Deciding when to expand a thriving business is a good problem for any small-business owner to have. With the right market research and financial guidance, the decision to greenlight the expansion should be an easy one.

© YC Partners 2025