4 Signs It May Be Time to Expand Your Small Business

Starting a small business comes with a good degree of risk. After all, you're not only putting yourself out there, but you're likely pumping some of your personal cash reserves into that venture.

According to a 2018 report from the Small Business Administration, only about 80% of small businesses that launched in 2016 were still around in 2017. That means it's fair to say that 20% of small businesses fail within a year.

But you might reach the point, whether at the one-year mark or later, where your small business isn't just surviving, but thriving. And at that point, you may want to think about expanding your business. Here are a few signs you're ready to go that route.

1. You can't keep up with customer demand

When you first started out, you may have needed to make a huge effort to drum up business and draw in customers. But if, at this point, you're struggling to keep up with customer demand, then it's a sure sign that you're in a good place to expand. Doing so could mean enjoying a larger stream of revenue.

2. You're physically running out of space

Maybe you rented a small storefront a couple of years ago when your business was new and you had no idea how customers would take to your product line. But if, at this point, your company is doing well and you're physically running out of space to sell your product, then it's a sign a larger amount of space might be necessary.

Of course, you'll need to look at your banking records to see how much rent you can afford. But the cost of expanding your physical space might be more than worth paying when you compare it to the extra revenue you have the potential to generate.

3. Your industry is thriving and growing

It's one thing to think about expanding your small business when your industry isn't exactly doing well on a whole. But if you're part of a thriving industry that's been seeing steady growth, it's a sign that expansion plans might work out very well for you.

4. You're consistently exceeding your financial goals

As a small business owner, you might set different financial goals at the start of each quarter or year. If you've been consistently not just meeting, but exceeding those goals, then it's a sign you're in a great position to expand. Of course, you'll need to reset your goals once you do so, but that's certainly not a bad thing.

Just as there are risks involved in starting a small business, so too can expanding a business be risky. You might have to put up capital or take out a loan to fund that expansion, and there's always the chance it'll backfire on you and not increase your company's revenue as much as expected.

But if these signs apply to you, it means you're in a pretty solid position to look at growing your venture. And with any luck, doing so will end up being a very rewarding experience.