If your small business has already become successful, you may begin thinking about expanding or moving in a new direction.

You may want to offer a new product or service that will be different than what you already provide to customers.

This step is a big decision for small businesses and can take their companies to the next level or cause their downfalls.

Weigh your options carefully to decide if now’s the time to move forward with your company.

Expanding Your Business

When you consider adding a second location for your small business, you need to think about several factors:

  • Do you have enough customers near the second location to make it profitable?
  • Will it benefit your current customers and bring in new customers to have the second location?
  • Will it reduce costs by having another location?
  • Can you finance the expansion with current assets or will you need to borrow money?
  • Will you have time to manage two locations or finances to hire a manager?

In the end, you must decide what you gain by having a second location and what it will cost you. As with any decision, the benefits should outweigh the costs or it is not a sound business decision.

This doesn’t mean that your new location will begin making money right away.

It takes time to build a client base, especially if the second location is in a different city. You may even operate at a loss for the first couple of years.

What you must ask yourself is if your current small business revenues will be able to support the second location until it becomes profitable on its own.

Take Your Business in a New Direction

With advances in technology, the small business environment is constantly changing. If your company doesn’t keep up, it will get left behind. Products and services that were essential in the past may not be relevant today.

With that in mind, you may consider moving your business in a new direction.

You may add a new product or service to what you currently offer or you may completely change your business model. Since this is a major decision, you don’t want to make it foolishly.

Two reasons exist why a small business would go in a new direction.

First, the business is struggling and becoming more irrelevant. In this case, the action must be quick while making sound decisions as to which direction it should move.

Second, the business wants to be proactive because the trend is moving in a different direction. In this situation, caution is important to ensure that the company continues to be successful while realigning.

As the article, “5 Financial Tips for Starting a Business” states, you must calculate the cost of your new product or service as if you were starting from scratch.

You must determine the specifics of your new proposed direction to decide if it will be profitable right away or if there will be growing pains. Reinventing your company is much like starting from scratch, except now you have a reputation to protect.

Small businesses often find that they need either to expand or move in a new direction to stay relevant to today’s customers.

Making the right choices at the right times can ensure growth and continued success.

About the Author: Joyce Morse is an author who writes on a variety of topics, including finance and running a small business.