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16 Aug

Indicators That Suggest It Is Time To Expand Your Business

  • By Editorial Team



When you enter the competitive market as a new entrepreneur, you are focussed on the successful launch of your company and then on securing a solid position in the industry. However, as your business goes, further along, taking the next big step becomes quite a dilemma. By the way, expansion does not only mean earning more revenues. It could also mean catering to more customers, opening more branches, hiring more staff, driving innovation or producing higher-quality products. Well, if you cannot figure out when to invest capital into expansion, here are few indicators that will help you judge better.     

It is Time to Expand the Business – Top Indicators

1) Business Indicators

  • Increased Demand:

More demand needs more supplies. Therefore, if you are finding it difficult to cater to the growing customer requests, it is good news. It means the customers really value your products/services and have chosen you over other players in the market. However, before you go ahead, make sure the increased demand is not seasonal in nature otherwise you will incur losses when the demand slows down.

  • Opening of New Avenues:

Imagine you own a restaurant in Delhi and you often receive customer reviews stating that they wished you had a branch in Noida or Gurgaon. It means your customer base has grown and they wish that you expanded to other cities as well so that the foodies can access your restaurant easily. A smart entrepreneur takes customer feedback seriously.  

  • Turning Down Lucrative Opportunities:

With the steady rise of your business, you will see both your clientele base and network grow. This means there will be more opportunities knocking at your door. There will be bulk orders or invites for business collaborations but if have to turn down all these offers due to lack of inventory, employees, or simply time, it’s a clear cut sign that you need to scale up and set bigger goals.

  • Steady Flow of Leads:

All businesses attempt to convert a potential buyer into a loyal buyer. Therefore, if you are witnessing a steady flow of leads, i.e. people are enquiring about your goods and services, it means the business can look to spread its wings. Maybe until now you had not thought of advertisement but now your next expansion move could well be to go on a marketing overdrive to reach audiences you have not reached.   

  • Successful and Repeatable Sales Model:

Once you gain experience in a sector, it becomes more of a planned process instead of a hit and trial method. You know exactly what is your target group, how can the leads be converted into customers and how to trump your rivals. You can use your successful model of operation to launch newer products, open more branches, or acquire units.   

2) Financial Indicators

  • Steady Cash Flow:

If your business has been functioning without any great fluctuations, it means there is a steady flow of cash in and out of your business. This shows you can now predict the future sales revenues. This should give surety to a business owner to take another step towards expansion as the sale numbers are good to go and the business is quite stable. 

  • Regular Profits:

A business does not always make profits and struggles during lean phases. Therefore, it is important to make hay while the sun shines. If your business revenues are bigger than your expenditures, you can use a portion of the profits to fund your expansion plans.

  • Presence of Capital:

Growth greatly depends on capital efficiency. While it is important to have savings to deal with emergencies, you should not stock money that you can ideally use to scale up your business. Experts suggest that keeping 3 months of operation cost in your rainy-day fund is sufficient. You can use the rest for expansion purposes. 

3)Human Indicators

  • Overworked Staff:

This is a consequence of increased demand. If you and all your staff members are clocking more than 12 hours a day instead of the 8-hour norm, and look exhausted, you are calling for trouble as only a relaxed environment leads to more productivity. You may hire more employees with the right skill set to share the workload. 

  • Reliable and Motivated Employees:

Successful businesses owe a lot to their workforce. If you have built a strong team of innovative, trustworthy, dedicated, and self-motivated employees over the years, you can scale up knowing that they will handle the extra pressure. You can delegate work to them and be assured that they will live up to your expectations.


It is not easy to take decisions of expansion as it always involves an element of risk. In addition, some may argue that if it is not broken why to fix it. Well, stagnation never works well for any business and a business owner always keeps an eye on the opportunity to grow. Expansion plans, however, should not be guided by gut feelings but clear indicators such as the ones mentioned above. So, get your timing right and see your business reach greater heights. 


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Did You Know

Loan to Value Ratio (LTV)

LTV or Loan to Value Ratio is the ratio of the loan amount to the value of the property or any other asset being purchased. A high LTV means that the borower is taking a risk and borrowing a major portion of the asset value. So the lower the LTV, the more easily a borrower will get the loan. But a good credit rating can help a borrowers to get a high LTV loan.

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