Small Business Shared Interest Group

As I've been in the Fractional CFO space for about 7 years, this topic is one I saw on our suggestion board, and I liked it!

Expansion requires capital. Owners should ask themselves, are your financials stable enough to support additional expenses? Have you analyzed cash flow, margins, and ROI on potential growth investments?

Consistent Demand: Look at sales trends. Is there a sustained increase in demand for your product or service, or are you riding a temporary wave?  I've also witnessed owners adding on a lot of overhead/SGA and tried to figure the rest out later.

Operational Readiness: Does the business have the systems, processes, and team in place to handle the growing workload? Expanding without adequate infrastructure can lead to burnout and inefficiency.  Also, a thorough analysis of bottleneck resources is a must!

When thinking about growth, the owner should take a step back and evaluate the bigger picture. Expansion isn't just about increasing revenue-it's about growing sustainably and strategically.  As a Fractional CFO, I've heard the stories of owners disgruntled with doing more work, with the same or lower bottom line as before the expansion!  Value comes from efficiencies & effectiveness.  The Accountant role can identify strengths & weaknesses.

Jason,  This is a great article and covers much of the considerations for expansion.  As a business owner, I have expanded both successfully and unsuccessfully.  A couple lessons learned that I might be able to add.  First, know that you cannot commit yourself to 2 or more locations like you can one.  A lot of business owners work hard in their first business, and that drives success.  If considering expansion, make sure you have talent that will care and drive as hard as you do for the success you need at additional locations.  Second, it is my strong recommendation that if you expand, you duplicate what you have that has been successful.  When I expanded in one city, I didn't do that, and I learned the hard way.  If oyou have a location that is successful, plan to duplicate what you have with regard to product offering, capacity and location.  As an example, if you are in a suburban plaza location, don't put your next location in the inner city on a busy street.  Finally, when determining financial viability, know what sales you need to break even and be realistic about whether you can exceed that.   

As I've been in the Fractional CFO space for about 7 years, this topic is one I saw on our suggestion board, and I liked it!

Expansion requires capital. Owners should ask themselves, are your financials stable enough to support additional expenses? Have you analyzed cash flow, margins, and ROI on potential growth investments?

Consistent Demand: Look at sales trends. Is there a sustained increase in demand for your product or service, or are you riding a temporary wave?  I've also witnessed owners adding on a lot of overhead/SGA and tried to figure the rest out later.

Operational Readiness: Does the business have the systems, processes, and team in place to handle the growing workload? Expanding without adequate infrastructure can lead to burnout and inefficiency.  Also, a thorough analysis of bottleneck resources is a must!

When thinking about growth, the owner should take a step back and evaluate the bigger picture. Expansion isn't just about increasing revenue-it's about growing sustainably and strategically.  As a Fractional CFO, I've heard the stories of owners disgruntled with doing more work, with the same or lower bottom line as before the expansion!  Value comes from efficiencies & effectiveness.  The Accountant role can identify strengths & weaknesses.

As I've been in the Fractional CFO space for about 7 years, this topic is one I saw on our suggestion board, and I liked it!

Expansion requires capital. Owners should ask themselves, are your financials stable enough to support additional expenses? Have you analyzed cash flow, margins, and ROI on potential growth investments?

Consistent Demand: Look at sales trends. Is there a sustained increase in demand for your product or service, or are you riding a temporary wave?  I've also witnessed owners adding on a lot of overhead/SGA and tried to figure the rest out later.

Operational Readiness: Does the business have the systems, processes, and team in place to handle the growing workload? Expanding without adequate infrastructure can lead to burnout and inefficiency.  Also, a thorough analysis of bottleneck resources is a must!

When thinking about growth, the owner should take a step back and evaluate the bigger picture. Expansion isn't just about increasing revenue-it's about growing sustainably and strategically.  As a Fractional CFO, I've heard the stories of owners disgruntled with doing more work, with the same or lower bottom line as before the expansion!  Value comes from efficiencies & effectiveness.  The Accountant role can identify strengths & weaknesses.

🌟 The Art of Expansion: Strategy & Sustainability 🌟

Hi Jason, Mary, and Dana,

I'd love to tag you guys, but the tag@function doesnt work!!! hmmmmm

:(   

 (no emojis either)

Super discussion on such an amazing topic for SMB owners! 👏

Jason, your insights into financial stability, demand trends, and operational readiness lay an excellent foundation for evaluating expansion opportunities. 📊

Jan, your personal experiences add invaluable perspective-especially your point about duplicating what works and finding the right talent to sustain growth.

Dana, your reflections on post-COVID challenges and creative adaptation strategies bring another dimension to this conversation.

To build on these points, I'd love to hear more from everyone:

1️⃣ Financial Preparedness: What specific tools or models do you find most effective for forecasting and assessing risk before expanding? Are there benchmarks or KPIs that guide your decisions?

2️⃣ Talent Readiness: What strategies have you found most effective in identifying and preparing leaders for new locations?

3️⃣ Adaptation in a Changing Market: What are some other innovative approaches you've seen businesses adopt to manage expansion risks or optimize existing operations?

How in the heck do you balance the desire for growth with the discipline of sustainability?

(It's so easy to chase revenue at the expense of profitability or stability.)

Let's keep the conversation going. 💬

"How in the heck do you balance the desire for growth with the discipline of sustainability"

In my experience this has been about discovery of constraints, which manages risks.  Cash flow is the obvious one.  Knowledge is power.  For example.

A new contract comes along that doubles gross margin.  Can we take it always = "yes".  Patient guidance must be alive & well so that we discover the payment terms - or risk to delayed payments.  Because employees are needing to be paid each week.  That's a hard stop.

Best to go to the bank for a line of credit 3-6 months out than at the 11th hour.

JS

🌟 The Art of Expansion: Strategy & Sustainability 🌟

Hi Jason, Mary, and Dana,

I'd love to tag you guys, but the tag@function doesnt work!!! hmmmmm

:(   

 (no emojis either)

Super discussion on such an amazing topic for SMB owners! 👏

Jason, your insights into financial stability, demand trends, and operational readiness lay an excellent foundation for evaluating expansion opportunities. 📊

Jan, your personal experiences add invaluable perspective-especially your point about duplicating what works and finding the right talent to sustain growth.

Dana, your reflections on post-COVID challenges and creative adaptation strategies bring another dimension to this conversation.

To build on these points, I'd love to hear more from everyone:

1️⃣ Financial Preparedness: What specific tools or models do you find most effective for forecasting and assessing risk before expanding? Are there benchmarks or KPIs that guide your decisions?

2️⃣ Talent Readiness: What strategies have you found most effective in identifying and preparing leaders for new locations?

3️⃣ Adaptation in a Changing Market: What are some other innovative approaches you've seen businesses adopt to manage expansion risks or optimize existing operations?

How in the heck do you balance the desire for growth with the discipline of sustainability?

(It's so easy to chase revenue at the expense of profitability or stability.)

Let's keep the conversation going. 💬