Good idea but there are some words of caution from the experts.
It may be that you have an addition to your goods or services. You see an opening in the marketplace.
"So if all of these situations come together where they’re able to sell their products or services at a lower price and they’re also able to make a greater profit than what they normally did, then that may be the time for them to go ahead and consider expansion,” said Galileo Tan, Central Pacific Bank.
What kinds of factors would figure into a decision to expand your business?
"You may have marketable resources that you’d like to expand on or your product that you sell may have some new features or benefits that will give you that edge over your competitors,” said Tan. “So these are all good reasons to consider if you are looking to expand."
No matter what your decision might be, it’s imperative that you have positive cash flow. If you need a loan, that’s the first thing a banker will ask about.
"Because with any expansion that occurs, in any industry, whether it’s a product you’re selling or a service you’re providing, you’re going to need that increased cash flow because that increased cash flow will make up for all the additional costs and expenses that you have in running the business,” said Tan.
There are various ways to get a loan for expansion, a term loan or a line of credit. Talk to your financial advisor about the best approach. The other difficulty with expansion is finding yourself not totally in control.
"You probably were used to having your hands in all of the day to day operations,” Tan shared. “If you’re expanding, in terms of opening up a second location or growing your existing business, making it larger physically just selling more products and providing more services, then obviously you’ll need more help from other individuals."
See the original article at: KHON2 Local News
