As a business owner you are always looking for ways to grow your business, and as you begin to increase sales and sense new opportunities it is not unusual for your thoughts to turn to expansion. But unplanned expansion can be as dangerous to your business as no growth at all.

http://www.localleadsgeneration.com/
https://barryspoolsparepairservice.com/

Fast growth can destabilize a business giving its owners a false sense of security while the additional sales volumes can eat up more working capital than expected.

If you are aiming for business expansion, keep these things in mind.

Watch Your Overheads

The biggest danger in running a business expansion program is the loss of profit that comes from uncontrolled spending when you are just too busy to keep track of what is happening. Overhead expenses that were under control in the stable business situation can grow rapidly to cover the extra expenses associated with a bigger scale of operations – transport, inventory, rental on larger storage space, and all the rest will eat into your working capital levels if not watched closely.

Track Your Profit Margins

You would normally expect that you can increase sales volumes and achieve the same profit margin, or even better since overheads will be spread across a greater amount of sales income and because the cost of goods goes down as you buy in greater quantities But this is not always the case. Additional sales often come with unanticipated costs and reduced efficiencies that can actually decrease your margins. You need to regularly track your profit margins to see if you are really growing or just running faster to stay in the same place.