Knowing when to expand and contract your business is a key element on the continued success of your endeavors. Most companies fail not because their business was doing bad, but because of the mistiming of expansion. Being too aggressive has its disadvantages as well for one can lose your shirt in such movements. But that is what business is all about, managing risks and taking chances. One of the things that you do have to know is how your business is doing financially. Don’t worry if you have no penchant for numbers, getting a good accountant and financial advisor will enable you to figure out how you are doing financially provided you are transparent with your advisor with all your past transactions and financial history. This person should know intimately your business dealings. They are signed anyway to a confidentiality agreement which binds them from ever disclosing any financial matters to anyone save the Internal Revenue Service when needed.
Suppose you own a car service center in Cardiff and would like to expand to Bridgend. Getting a Bridgend accountant to actually help you do your survey into this expansion is important. A Bridgend accountant has intimate knowledge of the area, and would have a good feel on how the business is doing in that place. This accountant could also get for your valuable information about data on Bridgend which you may use in your study and survey of the area. Information like where to place your shops, who are your competitors, what are the zoning rules regarding placing your car repair shop, what are the local taxes involved in setting up a business there and are there any incentives in placing your business. The Bridgend financial advisor will help you by filling the data needed.
Once this is done, then decisions have to be made for this expansion? Do you have the cash requirements? Do you have access to cash through loans or through suppliers’ credits? How much working capital is needed? What is your return on your investment and how long do you see a return on the original investment? These questions have to be answered and for some companies, it may even be better to borrow money than to use existing cash reserves because the cost of money may be cheaper and you are confident with your market that this money will be recuperated. Getting such data is internally generated from how your main business is doing. Your financial advisor should be able to give suggestions or at the very least, let you know of the probable outcomes, given certain assumptions. And then, knowing all of that, you make the decision. After all, it is your business.