The majority of MSP business owners started out as a one-man operation or, at least, as a very small company. As business spikes, the client base expands and the revenue starts rolling in. At this point in time, business expansion is worth serious consideration. The challenge is to time your business expansion just right.
Let’s take a quick look at the top considerations for business expansion:
Consider Your Cash Flow
Growth spurs revenue yet it costs money to grow in the first place. It might be necessary to go into the red or take out a loan until sales spike following the investment. However, revenue alone will not suffice. Consider if your business is properly structured to make a profit. If you are barely making a profit or not profitable, expansion might not be worth the risk.
Consider Your Business’s Goals
If your MSP business is not reaching its goals, expanding is not the best decision. Instead of expanding, you should consider making adjustments that help you reach your goals. Alternatively, you can alter your current goals as necessary. Continue to set realistic goals, strive toward them, and you will enjoy sustained growth in due time.
SEO and Marketing Matter When It Comes to Expansion
If you expand to a new area, marketing will prove challenging as the target clients might not be aware of your business. Focus on enhancing your search engine optimization (SEO) along with improving your location-based marketing and growing your business will prove that much easier. SEO is especially important as it reaches everyone in the region who is interested in your offerings. This is a low-cost means of connecting with new clients who genuinely need your services.
Is the Business Scalable?
Scalable businesses are those in which heightened revenues cost less than existing revenue. The profits following expansion should exceed growth costs. Though operating costs will always exist, truly scalable businesses do their best to keep the variable costs— or those added with each newly acquired customer— as low as possible.
Consider Whether You and Your Team Have the Same Values
Use your mind’s eye to fast forward five years into the future. Do you see yourself working with the same people? Are your current team members truly invested in expanding the business? If your co-workers are not all in, expansion will prove egregiously difficult. If you suspect some team members are not giving their all, do not hesitate to replace them before you expand the business.
The Last Step: Consider If You are Ready to Expand
Do not forget to do some soul searching prior to moving forward with your MSP business expansion. If your head and heart are not in it, expansion will prove challenging. There will be some obstacles to overcome. If you are motivated and willing to work hard to overcome the inevitable challenges ahead, you are ready to expand.