Many companies do well indefinitely with the same basic operational model, customer base, and vendor relationships. However, as a seasoned business owner, you may reach a point where you see a big opportunity that can only be reached through expansion. Breaking into unchartered territory may include new product lines, different markets, franchising, distribution, or even the acquisition of another company. Each of these expansion routes requires a major commitment of time and money. Each also requires due diligence in order to be executed successfully.
Just as when your business was launched, funding will be a major concern. Established businesses have had time to build resources, but many cannot afford to tap cash flow for significant growth opportunities. Therefore, borrowing from a lender or bringing investors on board are typical options. The most important steps you can take for successfully securing expansion financing from either of these sources are:
- Research all possible expansion approaches, and choose the one that makes the most sense for your company.
- Update your business plan to reflect the expansion—or create a business plan now if you never did!
- Ensure that your business plan includes a detailed financial forecast of at least five years to determine your funding needs and to illustrate the application of funds and repayment plan.
