Expansion can mean different things to small businesses. For some it’s about opening more bricks and mortar stores, for others it might mean simply moving from a small office to a larger one, it could mean expanding into international markets, or even broadening your remit and adding online services to an already-established storefront.

The question is: How do you know when – and if – it’s the right time to expand your business? If you consider the right timing, get your finances in place, research new markets and establish a customer-first culture you are on track to set your business up for expansion.

It’s all about timing

How do you know if it’s time to expand?

For b.box for kids – winner of the Top Exporter category at the 2016 Smart50 Awards and supplier of baby and children’s utensil products – it was all about the customer.

“One of the tell-tale signs for expansion overseas is when you’re getting a lot of interest abroad,” says co-founder Monique Filer.

However, she says, “Having a strong foundation in your home market so you can comfortably support yourself locally, is essential. Business owners can then take that local foundation to expand internationally.” The business now supplies its baby and children’s products to 22 countries.

Consider whether you should introduce new products and services

Continually reinventing your business’s approach will help you survive in a crowded marketplace, and that may mean bringing in new products or services.

If you’re committing to a product or service expansion, ensure you have good production capacity at a level that can support two markets, and that you can align the right logistics for dispatch, advises Filer.

“I also found the right partner – a trusted distributor that would do my brand justice.”

This strategy sounds relatively simple, but you need to identify what products and services your customers want, how much they’ll be willing to pay and whether you can sell them at a profit.

ANZ’s Business Ready tool can help you achieve your business goals with easy-to-use tools that set your business up for success.

Examine and prepare your finances

Do you have access to capital to support the investments required to grow? Should you burden yourself with more debt or seek more equity?

“[Finance] is an ongoing challenge for most SMEs. Entering a new market requires a huge capital outlay before you start seeing any return,” says Filer.

“You need to see whether sales from your current market can support your proposed market, or you need to look for investment. Essentially, you either self-fund or get investment,” she says.

“For example, at one point we looked into expansion and warehousing in Europe, but the capital outlay made it prohibitive.

“Those funds could be better used in product development or buying more stock; it was too risky at the time.”

Since you may not see profits for a number of months, you need to have the funds to continue running the day-to-day business until that time.

Ensure you budget and monitor your cash flow so you have enough to pay your creditors and enough profit to put back into the business.

Target new markets

Are you looking to enter new markets, either interstate or internationally?

“Thoroughly research the market you want to go into, your key competitors, the key markets and, most of all, speak to people who have done it before and learn from their experiences,” says Filer.

Customers and regulations are different in every market – you need to be equipped to deal with the culture of that market, and that means having team members with the right skills for operating in an international environment.

Maybe it’s not time to grow

Some business owners prefer to maintain their current level of operations as expansion doesn’t necessarily yield bigger incomes, and expansion is almost always accompanied by increased expenses.

You may feel your strategy is about keeping your core customers happy to gain longevity in your target market. And that’s OK too.