Small businesses have seen exceptional challenges and opportunities over the last couple of years. Between the uncertainty of the economy and COVID-19, many business owners have questions about their future, especially when thinking about expanding. Whether you are considering expanding a current business or opening another location, here are eight questions you’ll want to ask your business banker when thinking about a business expansion.
1. Is it the right time to expand?
Even with some concerns about the economy, you still want to be able to take advantage of opportunities while preparing for any challenges. A solid plan of action is always in your best interest. Getting confirmation and feedback from your business banker makes it that much more feasible. So, get prepared to meet with your banker. Nothing must be exact at this time. In fact, now is the time to dream and see what your banker thinks of your ideas.
2. Is my Business Plan feasible?
One step you can take immediately is to update your business plan. If you have a business plan you created when you started your business, now is the time to dust it off and make some updates. Begin with growth projections. Start documenting your dream expansion. Are you looking to expand in your current location or add a new location? Is your desire to expand because of your current growth or future opportunities? What will this do to your current revenue and expenses? Can you handle additional overhead? Document your revenue and expense projections. This is a good time to play devil’s advocate. What will happen if you don’t meet your projections?
3. What are the potential roadblocks?
When thinking about making any changes to your business, you want to be mindful of the things that can go wrong and plan for them. Again, it’s a good time to play devil’s advocate. Think of any pitfalls you might encounter. You can’t know all this, and you don’t want to assume failure, but it’s better to be prepared in case you experience some drawbacks.
4. Do I have the appropriate staff to handle an expansion?
Remember – you are only one person. Having the right staff in place is critical to expanding your business. They must share your vision and values. You’ll want to be sure to have a manager/team prepared to take on the expansion. Make sure you can find staff where you want to expand. Consider the time and location for training. Also, with new work-from-home options created by the pandemic, consider how you will manage your working hours in the business or if you will provide opportunities to work from home.
5. Will my current systems and procedures work?
Envisioning an expansion, you’ll also want to make sure your current systems and procedures will work for you. Now is a good time to start documenting your workflows and brainstorming potential growth changes. Challenge yourself to eliminate steps in your workflow if you can make things more efficient. Remember a few adages – don’t keep things because you’ve always done it that way and don’t fix it if it isn’t broken. With newer technology, new systems and/or procedures might be in order.
6. Will I need additional equipment?
Considering how your business operates today, there is a real possibility you will need additional equipment from transportation to machinery. Think about how you will go about getting additional equipment. Can you find used equipment? Is there equipment that is more updated to help you run more efficiently? You will want to talk with your business banker on the ability to finance any new or used equipment.
7. Do I need a marketing plan?
This is where you really want to understand your target audience. Can you penetrate a new market? With the internet and social media as major advertising mediums today, there are a myriad of ways to advertise your expansion. And just as there are many new mediums, there are traditional avenues that still work including word-of-mouth. However, you must understand your target audience to know which advertising mediums attract them. Sometimes it’s a combination of them all. Knowing your customer, along with having a practical marketing budget will prove valuable.
8. Is my timeline realistic?
After reviewing all these questions with your business banker, they will be able to walk through a realistic timeline with you to determine your readiness – especially if you need real estate and equipment loans along with a line of credit to help with your expansion.
Although your business banker cannot predict your future, they can help you review these questions. Your business banker has walked through numerous expansion plans with many small businesses. Use their expertise to your advantage.
Now is the time to explore the opportunities and challenges to expanding your business. These questions allow you and your banker to start considering all your options, so you feel comfortable with your decisions…and your future.
To learn more about KCSB’s business services and loans, see Your Guide to Business Banking. Feel free to call 269.679.5291 or visit a branch office to set up an appointment to meet with a business banker today. See https://kcsbank.com/locations to find a location most convenient for you. Discover a more personal business journey with your community banker today!
Kalamazoo County State Bank is an Equal Housing Lender and Member FDIC.
