If you’re thinking about expanding your home-based business, first, congratulations. It takes some dedication, focus and work to reach the point where you need to take steps to accommodate progress and growth.
While it’s most definitely exciting, it can be a little worrying too. There are several factors to consider to make sure you’re expanding in the right way in order to minimise any risk.
Manage Your Finances
Any expansion will probably lead to some increase in your costs of doing business. Hopefully, it will also see an increase in profits that will more than offset any cost rises.
Things to consider include reviewing and revising your Terms & Conditions, your client contracts, your budgets and cash flow forecasts and your staff agreements. If you’re considering taking on staff (or extra staff) you could consider hiring temporary employees to start with.
Make sure you thoroughly know your margins, if there’s room for improvement there, and your break-even points. If you need some professional advice on business finances, don’t fight shy of getting it. Maybe you could have shorter trading terms to bring money in a little faster and build a more robust collection process if you need to chase unpaid invoices or initiate legal proceedings. The hope is that you’ll never need to take such actions, but it’s as well to know where to turn for help should problems crop up.
Take Care of Planning
Revisit your business plan and bring it up to date for your expanded aims. This is especially important if you’re planning to borrow money during your expansion. When you form a strategy and have an idea of the route you’ll take to meet goals, you stand much more chance of success. You can also monitor your progress and change either your goals or your actions if things aren’t going as you expected.
That can work both ways. Your expansion might be even more successful than you originally hoped and you need to change your plans to incorporate even more expansion. On the other hand, maybe you’re struggling a little and need to rethink your time scale.
Planning allows you to foresee some of the potential problems and build in some flexibility. It helps you deal with the unexpected.
Minimise the Risks
Risk in business comes at you from all directions, but that’s not necessarily a bad thing as it’s part of the excitement of building your own corner of the empire. And there are strategies you can take to minimise your risk.
The type of building you expand into, for instance. Traditionally leased offices are often expensive and come with long contracts, meaning you need to be pretty confident you can maintain the increased workload of a bigger business. An alternative is a flexible office, which offers you just the same level of professional service and status, but without the complicated paperwork or long terms.
Very often, a flexible office will have self storage close by, offering a second advantage. If you have business equipment or stock to store, you can keep it close to the office and save time and money. If you need business storage more than office space, look for facilities that cut your business rates and have good security.
If you employ people, try and make sure they’re cross trained so more than one person can do every task. It really helps in a small staff when others can step in to cover sickness and holidays.
Make sure your insurance covers your new working arrangements, and bear health and safety in mind all the time.
Review Your Record Keeping
With more business coming in, your bookkeeping and accounting will probably become a bit more complicated too. Maybe you need to register for VAT, deal with payroll for the first time, get to grips with pension plans or learn more about expenses or limited companies.
For a broad understanding of the legal requirements your expanded business must meet, the HMRC website has a wealth of information. But professional accountants are also worth their weight in gold, not just for the practical help with your accounts, but also in terms of individual advice and money management
It’s certainly a lot to think about and can be a bit overwhelming if you try and figure it all out at once. But take your expansion in stages, understanding exactly what your business needs and what you must do to meet them, and it’s probably one of the most rewarding (and potentially lucrative) things you’ll ever do.