Is Now the Right Time to Grow Your Business?
Ever wonder if it’s time to grow your business? Wouldn’t it be nice if you could just wave a wand and it would get done? So how about if we walk through some ideas as to what you might want to consider regarding opening your next office.
Usually the first question that needs to be answered is how you know when it’s time to open your next office. I believe that your first thought needs to be whether or not you have totally maxed out your existing market penetration of the geographic area that you are servicing. You need to know how many structures are in your area, both commercial and residential. You might want to also consider breaking this down into two lists: a residential list and a commercial list. Then, go into your list of past jobs, by year, and count how many jobs you did in each year. The point being that you have the data that will tell you exactly what you need to consider doing in the future. Once you have the data to review, you need to determine answers to the following questions:
• What is your percent of your market penetration?
• What is the average local penetration?
• Where do you rank compared to others?
As you can see, it has taken you a lot of effort to determine what your data is telling you. Now you need to compare it with your local competition. When you ask them for this kind of information, you will probably find that they have not done the work necessary to give you accurate data. That will generally not preclude them from making statements to you as to what they believe is going on in their business. You might want to consider some of the following ideas. Set yourself up as the average company in your area. Compare your data to theirs, for example:
• If you have 5 vehicles, how many do they have?
• If you have 10,000 sq. ft. of building, how much do they have?
• If you have 11 employees, how many do they have?
You get the picture. The point is that by comparing yourself to others, you can make some predictions about what they are doing compared to what you’re doing. The most important point to keep in mind is ascertaining the correctness of the data.
You often hear people talk about the size of the market and then a lot of numbers get tossed around. You need to begin to track down the source of the data and verify it. You are getting ready to bet a large amount of time and money on your information. No one ever talks about their failures, but they are usually very proud of their successes.
A source of information for you will be the post office and the U.S. Census Bureau. Knowing what has been reported by others is a good way to compare your stats.
Another consideration is to answer the question regarding how much money you need and how much money is enough to fund your lifestyle. You may find that you are making enough money now. The key is to know what the goal is. There are several reasons for this. If nothing else, you will know when you have achieved the goal you set out to achieve. So rather than going home each night and thinking you’ve not yet gone where you want to go, when you reach your goal, you can quit for the day and know that you’ve done what you’ve set out to do. You can also know that you do not have to keep the growth push on!
So, let’s say that you’ve done the numbers and you’ve decided to grow by opening an additional office. Who’s going to run it? Is it going to be you, an existing employee or a new person? Is the person running it, assuming it’s not going to be you, going to have any skin in the game? Keep in mind that what you are going to ask this person to do is to function like an entrepreneur. This means that at some time in the growth period of the effort towards the new office, the person is going to ask themselves “the question.” Why am I doing this for someone else when I could be doing it for myself? There will even be others around them (i.e., spouse, family and friends) asking them the same thing.
Growth is a good thing, but there’s a lot more to it than what may initially meet the eye.