A business expansion can mean opening a new location or renovating a current space.  It could also mean that a business is looking to expand their client base, offering a new product or service or looking into a new geographical area. No matter what type of expansion you’re planning for your business, there are a number of things to consider first: 

• Why: Before undertaking any kind of major change to your business, it's a good practice to step back and ask yourself “Why are we considering this?”  If the answer is something like high market demand, it could be a great time to proceed. Having a strong business plan will help you weigh the pros and cons and make sure the “why” behind the expansion is for all of the right reasons. 

• Timing:  Another important question to ask yourself: “Is this timing right?”  Timing can mean a number of things, like whether the timing for your business is right or if the market can support your expansion.  If, for example, you’re opening a second location and there’s steep competition around, you need to consider how hard it will be to recruit or train talented staff who can represent your business to its fullest potential.
• Risk tolerance:  Any kind of expansion can be considered taking a risk.  Having thorough research and planning is a great way to mitigate some of the risk but no amount of preparedness can take it away entirely.  It is important to ask yourself how prepared you are for this venture to not go exactly as originally planned.
• Finances: If you have all of the capital needed for your expansion you may still want to consider financing a small portion of the project so that all of your capital isn’t tied up in one place.  If you’re in a position where you would like to expand but don’t possess all of the necessary capital, a larger loan could be an option as well.  Receiving 100% of the funding as a loan isn’t typical, as most lenders want to see the owners invest equity into the deal.

There is a lot to consider when you’re getting ready to expand your business. Two things that will help you along the way are a strong business plan and taking advantage of your network.  Being able to look to trusted advisors, who have expertise in areas that you may not, can have a huge impact on your overall planning and success.  If you would like to discuss any of the information here, your ideas and plans for expansion or financing for your business, send a message to a member of the CUA Commercial Team.