Maybe you have noticed that of late, you have been stocking up your butchery with twice the amount of meat. Or maybe the line at your barbershop has been getting longer and longer, leading to delays and potential customers turning away because they cannot wait for that long.
This can be a good sign at first glance. It can be an indication that your business is doing well, and that demand is great. But no business person wants to lose customers because they cannot satisfy the demand.
It is at this point, after a long day working on your business, that you may find yourself thinking about expanding your business. Here are a few things to consider:
Think long term
During the December holidays, Kenyans tend to travel and houses become full with relatives. This can increase the food budget and if your business is in an area where there has been more visitors, you can see an increase in demand for your product if you are in the food industry.
However, this should not be a reason to expand your business because when the holiday season is over, these people will return back to where they came from leaving you with a reduced customer base.
Before expanding your business, consider if you have the space required. If your shop is in a rental house, chances are that you cannot go around knocking down walls unless you want the landlord to get angry, or jealous, or both.
You also have to consider if you have the right amount of people to assist with the extra work. You should also be able to look at your budget and make sure you can afford an extra person on the payroll.
There are businesses that are small and have been that way for years, some even decades. There are various reasons behind this but mostly you can find that the owner prefers the small size because it makes it feel personal. Some also feel like they don’t want the extra responsibilities that come with having a bigger business.
Before expanding, make sure you really give it a thought. Only make the decision to expand if it is something you really want. Otherwise, you might find yourself losing track of the direction the business is taking because you prefer the smaller set up.
Last but not least, make sure you have enough money to expand the business. This doesn’t mean to have every single shilling needed. You can start small, doing it in phases. Don’t be under the pressure to double in size overnight.
Start early by saving towards your goal. Determine the minimum you need and build from there. Additionally, you can use a loan from Tala to help realise this goal.