Is it Time to Expand Your Business?
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All good businesses need to grow and innovate to stay relevant. There also comes a time when the business needs to expand to continue serving the needs of an ever-changing market. But how exactly do you know when it's time to take the leap? Local business owners share their insights.
- You have loyal customers who ask for more products or locations. When your current branch is already serving the maximum number of customers it can handle or when you get multiple requests from people to open a branch closer to them, then it's time to consider expanding. According to Angie Tan, Operations Manager of SRFC Food Corporation, "When your client base has increased to almost maximum of your capacity to supply, you know it's time to expand to anticipate a bigger clientele."
- You have a strong team who shares your goals for the business. One thing to remember is that you can't handle an expansion all by yourself. "Expansion can bring a lot of stress so you should have a reliable team to help you and stay by your side for the next three to five years, or even more," says entrepreneur Marris Zapanta of Paccube.
- You sense the right opportunity. As the business landscape changes, plenty of opportunities also arise. As a business owner, you need to act fast to take advantage of them. "In my college, for example, despite a decline in freshmen application due to the implementation of K to 12, we identified two major opportunities that year," recalls Niel Dagondon, Chairman of CIIT College of Arts and Technology. "First, we opened up our own Senior High School courses. Second, we advertised that people who were unhappy with their colleges could transfer to us."
Once you've decided that your business is ready for expansion, these are the steps you need to take:
- Do your research. As the saying goes, don't enter the ring unprepared. You need to cover all your bases. "Expansion entails a lot of research, trial and error, and hiring of good people to join the marketing and development team," says Anna M. Beltran, VP-COO of Framedia, Inc.
- Make a cash-flow analysis based on your needs. Don't be afraid to bring out your spreadsheets and crunch the numbers. "Determine how much money is needed to do the expansion," advises Marc L. Yao, founder of MLY Enterprises. "If you're looking to add more stores, you'll need to scout for feasible locations. If you want to expand your product line up, you'll need to study the market and see what products will be suitable for it."
- Communicate with your team. Delegate tasks clearly so that your staff won't be confused about what to do. "Identify key people who can take charge of expansion," adds Dagondon. "It will be a rough ride considering the local business environment—in terms of both government permits and construction headaches. But it is fulfilling nonetheless."
Get a loan to support your growth. A cash infusion via a loan can do wonders for your planned expansion. After all, "You need money to make money," says Javier Luis C. Villarruel, founder of Bayongciaga and Breakfast Basket Manila. "Banks are the best financial partners because of their interest rates. They also help you assess the viability of your plans for business expansion."
However, make sure you factor in the loan payments and interest charges when you do the cost analysis of your products. As Yao says, "Make sure you're able to get a good loan rate and that you can afford the monthly payments."
- Use the money wisely. Whether it's to increase production space or upgrade your facilities, make sure the loan is put to good use. "The money should be used to put up more locations or expand your inventory to meet customer demand," advises Jose Paolo Bustos, Marketing Director of Doctor Leather. Loans should not be used as a bridge to meet current expenses such as salaries and rent because the money will quickly run out."
Ready to expand your business? Citi offers personal loans with the following benefits:
- Approval in as fast as 24 hours
- Flexible terms of 1 to 5 years
- No collateral or guarantor needed
- High loan amount of up to P 2M (subject to approval)
Visit https://www.citibank.com.ph/gcb/loans/loans.htm for more details!