By Henry Brown

Surviving until you break even is the first big challenge that any new business faces. The next step is to actually start making a profit. Once you’ve managed that and you’re ticking over nicely, you need to start thinking about what you’re going to do in the future. You could always leave things as they are if you’re happy with the amount of money that you’re making, but the obvious thing to do is start expanding.

You could come up with new product ideas and expand your range or even attempt to break into new markets overseas. If you get it right, you stand to make a lot of money. However, expanding a business is easier said than done, and if you make big mistakes, you might end up killing the business entirely. If you’re planning on expanding your business in the near future, make sure you don’t make these common mistakes.

[amazon_link asins=’1119426316′ template=’ProductAd’ store=’succeedingi0d-20′ marketplace=’US’ link_id=’efbd97ca-c63b-11e8-a7b1-25aee40ef7ed’]Expanding too early

This is probably the most common mistake people make. When you’ve started to make some sales and your business is steadily growing, you might be ready to expand, but don’t jump the gun. Growth for a couple of months in a row doesn’t mean you should suddenly start making expensive changes to the business. That growth might not sustain itself, and if sales slow down again a few months down the line, you’ll have massively increased your overhead and have no revenue to pay for it. That’s why you need to start looking for the signs that your business is ready to expand. If you’re struggling to keep up with demand and you can’t manufacture and ship products fast enough, that’s a good sign. If you’re struggling to keep up over a long period, it’s time to expand. Struggling to get everything done with the number of staff you’ve got is another sign that you should bring more people on board and start expanding as well.

Look out for these signs that your business is ready to expand and, most importantly, don’t jump right into it. Only start thinking about expansion if you’ve got sustained growth over a long period and you can no longer keep up with customer demand.

[amazon_link asins=’0989091740′ template=’ProductAd’ store=’succeedingi0d-20′ marketplace=’US’ link_id=’06eb9569-c63c-11e8-beeb-5bc3234f2fb0′]Not financing expansion properly

If you’re making a profit, it’s always a good idea to invest some of that money back into the business. However, it’s not sensible to fund all of your expansion efforts that way. Having a surplus is important because there’s always the chance that sales are going to dip. If you spend all of your spare cash on expanding the business and then you fall on hard times, you’re not going to survive for very long. That’s why it’s a good idea to look into small loans to fund some of the basic initial costs of expansion. You’ll be able to pay the money back when you tap into new markets and start increasing your profits.

Failing to research the markets

Adding new products is one of the best ways to expand your business, but so many people get it wrong. The most important step here is researching the markets thoroughly. When you’re coming up with new product ideas, you need to identify what people liked about your current products and try to emulate those qualities in your new products. Look at your sales data and take note of who is buying your products. Consider age range, gender, social class, location etc. That will give you a better idea of who you’re actually trying to appeal to so when you’re coming up with new product ideas, you can make sure that you’re aiming for the right people.

If you don’t do enough market research and you have a false impression of what makes your products a success, you can easily waste a lot of time and money creating and manufacturing a new product that nobody wants.

As well as looking at the selling points of your own products, you need to consider the general market trends. Markets are always changing and a product that was relevant six months ago might not perform well at all any more. It’s always important that you’re tapped into these market trends, but it’s especially important if you’re developing new products.

[amazon_link asins=’B004FEG308′ template=’ProductAd’ store=’succeedingi0d-20′ marketplace=’US’ link_id=’19d273e3-c63c-11e8-85f2-893c57e9c921′]Not filling skills gaps

When you’re expanding your business, your staff are your best asset. Without a good team, you’re never going to get anywhere. That’s why it’s so important that you make sure you’ve got all of the people you need before you put your expansion plan into practice. That means identifying skills gaps in the business and plugging them. You need to think about what expansion actually means for your company and what skills gaps may arise in the future. For example, if you’re expanding abroad, you’re going to need somebody that understands those markets. Trying to fill skills gaps later on when they become a big problem is always going to cause you a lot of problems. Things will run a lot smoother if you have the team you need right from the outset.

Not planning for failure

Obviously, you don’t want to think about the possibility of failure here, but you have to be realistic. There’s always the chance that things won’t work out which is fine, as long as you plan for it. If you don’t plan for failure, it could kill the business entirely. That’s why you should come up with an action plan to scale back the business and shrink it back down to its original size if your plans for expansion don’t go the way you hoped they would.

Taking on temporary staff to start with is a good way to do this. It’ll be a lot easier to get rid of people and cut back on costs quickly if you fill a lot of the admin positions with temporary staff instead of permanent ones. You should also look for an office space with a short lease so you can get out of it if it becomes too expensive.

Business expansion is difficult and a lot of things could go wrong, but if you can avoid these mistakes, you should be fine.

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Henry Brown is an online marketing executive. When he isn’t talking shop he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.