When you first set out to become an entrepreneur, things are relatively simple. Sure, you’ll have a lot of things to learn and it might be quite scary, but ultimately you’ll only have yourself to answer to, operational costs may be low and you’ll be able to pretty much wing it.
If all goes well, then comes success. This means you’ll have clients to please and commitments to fulfill. The cost of doing business will increase and you’ll generally find you have a lot more responsibility on your plate.
At this point you will have a choice.
Either you can scale your small business — hire staff to help meet demands, invest in equipment, raise capital, lease an office, or keep things simple and continue to run your business as a one man (or woman) show; possibly even scale back to regain clarity and balance.
If you find yourself in this situation and you aren’t sure what to do here’s two approaches you should keep in mind.
1. Dig Deep and Reflect
Take a close look at yourself and consider what moved you to become an entrepreneur in the first place.
On one hand you may be a lifestyle entrepreneur, motivated to start a business so you could travel or spend more time with friends. If that is the case, you became an entrepreneur to benefit from more personal freedom. Therefore, you may want to consider scaling things back and remaining flexible. Of course this doesn’t mean you can’t startoutsourcing and using white-label services, but hiring staff and renting an office is only going to increase the responsibilities you must fulfil.
On the other hand, if you became an entrepreneur to create a great business, or make a huge change in the world, then you will probably want to expand as soon as possible.
If you are unsure, take a long look at the parts of your lifestyle and career you enjoy the most and take it from there. Remember, if you want to expand your business, but are currently enjoying your freedom, then you can always put your expansion on hold.
2. Consider your Business Model
Depending on the nature of your business, expansion may be harder, or quite easy.
For instance, if your business involves the production and sale of electronic devices, then you might want to expand quickly in order to pay for manufacturing costs and improve profit margins.
In contrast, if your business involves hand-made puppets, then scaling could prove more difficult, as you seek manufacturers to duplicate the same level of quality and ‘personal touch’.
Going into business, you will ideally have chosen a business model that suits the kind of lifestyle you want to lead. And if it doesn’t anymore, then you can always change the model.
Greg Fisher, founder of Berkeley Sourcing Group, has a strong manufacturing and engineering background, and is proficient in Mandarin. After graduating from UC Berkeley with an engineering degree, Mr. Fisher worked in the medical device, hard drive storage, ice cream, and professional tools industries in various management, manufacturing, and quality control capacities.
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