Business Expansion: How to Know if Now is The Right Time

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Although not with the regularity of kids outgrowing their clothes, sometimes business expansion is necessary if you want to continue growing. Yet, business expansion is a very challenging process, filled with uncertainty, stress, and threats that the expansion might cripple your business to the point where it can no longer survive.

business expansion

Not only does business expansion involve a myriad of critical decisions and structural changes, but you must also consider refining your policies to make the expansion work. Determining when to take the plunge on a business expansion is important since trying to expand too early, before the business can sustain a larger footprint, or waiting too long before expanding, may sound the death knell for your business.  Determining the proper timing is harder than it seems, with many companies jumping the gun and growing too early. Likewise, though, missing an opportunity for growth can also hurt your long-term potential as opportunities are scarce. Let’s take a look at some of the signs that you should look out for when you’re determining the right time to grow your business.

Types of business expansion

Just as there’s no set time when expansion is right, there’s no rule about how to expand and some types of expansion are more challenging than others. Expansion runs the gambit from adding another shift to your exiting operation (low risk) to international expansion involving a physical presence in the host country (high risk) to expanding into a new product line (high risk). And, there are all types of business opportunities to expand that fill in between low risk and high.

Determining the “right” type of business expansion requires a similar analytical process to determining the right time to expand. Factors impacting your decision regarding the right way to expand involve a thorough analysis of your resources, as any expansion requires a large investment in financial capital, slack time to plan for your expansion, and outside opportunity assessment.

In terms of a domestic expansion, here are some options:

  1. hiring a second or third shift at your business or expanding your hours
  2. offering a product extension, such as a new flavor or color
  3. developing a new product line for your business, where the level of risk varies depending on the type of new product developed (see below)
  4. opening a new location
  5. starting a second business operated under a corporate umbrella

In international expansion, you face the following options that represent an increased risk as you move down the options:

  1. export
  2. international collaboration/ partnership
  3. FDI (foreign direct investment)

Signs favoring business expansion

Expanding your business isn’t something you do on a whim nor is it appropriate to jump just because an opportunity arises. Instead, determine when it’s the right time to expand is based on a careful analysis of your operation, the outside environment (such as competition, economics, technology), and forecasts built on solid data.

There’s no set time when you should expand your business, such as after 5 successful years of operation. Rather, you should look for signs indicating that business expansion is the right opportunity to consider at this point. Below we list several of these signs.

Consistently rejecting work

It can feel bad when you have to reject work because you simply can’t deal with it. Whether this is turning down new clients or having to reject product orders, you might consider business expansion as soon as you reach this point. However, you shouldn’t rush into that decision as the increase might reflect seasonal changes or a bump from a successful advertising campaign or favorable review.

Hence, before you waste time and money on building an expansion, you need to make sure that the increased need for your product is consistent, rather than a bump unlikely to repeat with any frequency., The last thing you want is to spend a lot of money to expand your business only to see your enhanced resources in people, facilities, and inventory stand idle. Many companies try to expand far too early when they first start to reject work, which can leave you struggling to afford all the increased resources.

There are other options short of business expansion to handle an overabundance of work. Embrace the notion of lean and agile management to make the most of your new opportunities without costing you your existing business.

For instance, you might consider hiring gig workers rather than commit to hiring new employees. Similarly, you might contract out work to another firm to handle the overflow until you determine the increased need is consistent. If considering a new product line, develop an MVP rather than a fully functional product to test the waters.

Not enough space

It’s common for businesses to grow in small steps before they decide to take on a major expansion. This usually involves leasing versus buying equipment and hiring gig workers versus employees (called leveraging), but this strategy of stretching your dollars ultimately reaches a point when it isn’t sustainable anymore and you must bite the bullet by making long-term investments in people and stuff.

Websites like Fleet Up Marketplace can help you secure the tools you need when you’re looking at a large expansion. Alongside this, you may also need to explore the idea of moving into a larger workspace. Of course, though, it is essential that you have sufficient resources and forecasts to support the expansion thus justifying the increased expenditure of resources. You’ll likely still face some lean times until you gain traction in your business expansion but leveraging reduces the impact of this strategy.

New opportunities

New opportunities sometimes appear on the horizon for your business but you need to make sure that you are careful with the way that you act on them. Some opportunities will be worthy of outsourcing and hiring freelance workers, while things like long-term contracts and agreements with other businesses must wait for the opportunity to show more than a promise. You need to make sure that the opportunities you get aren’t temporary if they are going to be the driving force behind growth in your business. It’s easy to get excited when you get new opportunities, but you can’t let this get in the way of your progress.


With all of this in mind, you have serious tools to support business growth at the right time. Using these signals that business expansion is a viable option and taking advantage of leveraging options to reduce the impact of expansion on your existing operations, you’re positioned for long-term success.

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