A report by the Federal Competitiveness and Statistics Authority shows that SME contribution to the GDP of the region is constantly growing. In 2019, growth was approximately 53% up from 49%, according to the Emirates News Agency. With several measures implemented to reduce the cost of conducting business in the UAE, small and medium enterprises will experience increased activities.
For entrepreneurs, this is a perfect time to expand their small businesses to the next level. While scaling presents new possibilities and exciting opportunities to explore, it has its set of challenges. Before you can scale, you need to determine how far are you willing to go for growth, and if the timing is correct.
Increased Demand from Customers
If you have a regular flow of customers, it’s a clear sign that you need to expand. Customers are likely to ask when you intend to move to a spacious warehouse and stock your inventory, or when you will be opening a second store. This conveys that you need to expand to meet their needs. Though opening a second business location might satisfy customer needs, be cautious.
In most cases, increased demand can result from seasons such as festive holidays. It would be best to track the numbers because one month of increased traffic differs from the constant flow of consumers. Once you are sure the demand is consistent, you can start planning for business expansion.
Availability of Money to Buy a Business Vehicle
Scaling a small business is expensive. The high costs of moving to a new location, hiring more staff, and purchasing advanced tech devices hinder growth. At this point, you can start comparing different automobile models based on your daily operations. Of course, you want a car that will meet the transportation needs of your business as it grows.
Whether you do a considerable amount of traveling between offices or deliver cargo, buying a dependable vehicle is essential. A reliable car will save you a lot of money on fuel, repairs, maintenance while representing company success.
You Can Delegate Tasks
Expansion creates room for new opportunities. However, without proper planning, it can limit your control over the business. That is why you need to take caution beforehand. Ask yourself if you are ready to delegate managerial duties to someone else.
If you can answer confidently, it means you trust your team and think about growth. Nonetheless, you should have a plan for training current staff, recruiting fresh new talents, retaining valuable staff, and launching your company in new locations.
Expanding your small business at the wrong time often leads to cash flow problems. Fortunately, there are signs that will tell you are ready to scale up. Apart from increased customer demand, you will have insufficient space for operation and regular profits. A rule of thumb is to analyze each situation to determine if it is consistent or temporary to avoid failure.