Image by: By B. Gilmour
By Richard K. Noots
Owning your own business is no easy feat. Everyday, decisions you make can easily change how well received, or not received, your company is to the public. Sometimes, your business may start going under before you even realize it. Other times, your business is doing really well, but you expand too much, too quickly and you end up losing it all. So, how do you avoid such catastrophes?
By reading Danjur, of course! Hopefully, with a little friendly advice, we can help you steer your business in the right direction, taking you all the way to the cover of Forbes. We’ll illustrate the do’s and don’ts of business expansion, and what you should watch out for!
#1) Is your business coming or going?
The one truth of business is you either are rising or falling. There’s no such thing as surviving. So, if your business is on a downward stretch, consider yourself failing. Now, this doesn’t mean you need to panic, instead, get in gear. Looking at your company in this light helps keep you moving, instead of just waiting out the supposed bad storm that is a lack of profit.
Now, if your business is prosperous, this doesn’t mean you can just jump into changing your business model or expanding either. There are many variables to consider, which we will go over. For now, examine your business. Is it profitable? If so, how much? And, how much more do you think you can improve business?
#2) Do you want to change your business structure?
How do you own your business? Is it a sole proprietorship? Or do you own an LLC? Often, businesses will change between the different types (like going from a partnership to a corporation) for tax purposes. If you don’t know what I’m referring too, you really need a refresher course. Once that’s done, go ahead and get back here.
A huge part of making a transition like that easier is following the instructions to the tee. The IRS will come after you if you mess anything up, so it’s best not to give them a reason. Many businesses make the change from a sole proprietorship to an LLC in an effort to remove some of the liability off of them once more money starts coming in. Of course, you have to make sure you keep that profit up.
#3) Should you franchise?
When people have a vested interest in their work, profits follow. Expanding your business model for others to also join in is a good idea once you know people are interested. However, you’ll want to make sure to contact a franchise attorney before making any big decisions, as well as reading up on the exact process of how to make it possible. Don’t force yourself to franchise either, if no one seems to be pushing in that direction, it could be a sign to wait a little bit longer.
#4) Licenses, Allegiances and Diversification
If what your selling isn’t licensed, you should probably rectify that immediately. Licensing is a great way to receive money based on brand recognition as you become more successful. You’ll also want to make sure that other businesses with a similar product are aware of your friendly nature. What I mean by that is, they don’t have to be your enemy.
Selling other people’s products for commission is part of diversification. Don’t think of these other businesses as cutting into your profit, instead, view it as you getting a slice of their customer pie. Now, you have an already established business also spreading your name. What’s not good about that?
As for diversification, this is where you should expand. You should be screaming from the rooftops about how amazing your business is. Why not be a columnist who dishes out helpful advice for free in relation to problems that your product solves? Or, why not teach courses that help other adults know and use your items better? These are just small ideas, but when it comes to business, you should always be diversifying.
The only person who will sell your product in the end is you. So, treat it like any parent treats their child. Talk about it everywhere and ask everyone to get get involved. Expansion is necessary if you want growth. Just don’t shoot yourself in the foot. Remember, the bottom line is you’re either coming or going.
You’re not ready to leave the game yet, right?
What advice do you have for future business owners? How hard was it for you to expand? Do you have an LLC? Please share in the comments below!