When Should You Start Expanding Your Startup?


If you want to expand effectively, you need to time your growth properly.

There's no real "right" or "wrong" time to expand a business, but there are a handful of factors you'll need to consider to determine whether it's finally time to start building your client base and hiring more people.

Most entrepreneurs get lost in ideas of grandeur. This kind of ambitious thinking is great, and necessary if you want to achieve success for your startup, but you can't let these enormous visions get in the way of the practical side of your business development. It's tempting to think about growing bigger at a faster rate, but it's more reasonable to think about growing bigger at a more appropriate rate.

Expanding too early can put too much of a strain on your current resources, and take your business to an operational level that it is not familiar with and is not fully prepared to handle. On the other hand, expanding too late can make it nearly impossible to build momentum or make new changes to your business model.

If you're looking for the golden timeframe to expand your business, look for the following qualities in your business:

(Near) Profitability. Before you expand, you should be making money, or at least close to doing so. If your current model is hemorrhaging money, there's no reason to think expanding will suddenly turn things around.

Passionate Users. Even if your following is relatively small, as long as you have a handful of truly passionate, dedicated users, your app will have the potential to expand to new demographics or to a wider audience through social spreading and new user adoption.

A Flexible Team. Is your core team able to handle new responsibilities, at least temporarily? It's wise to hold off any major new hires until you're a little more settled into your new model in case things don't pan out as you anticipated.

Again, there's no hard measure for the "perfect" time to expand your business. Instead, you'll need to rely on a mix of logical factors (like the ones listed above) and your own gut feeling. When you do expand, do so gradually and with careful monitoring, or you could end up crashing and burning before you reach your next set of targets.

Jose Vasquez is a serial entrepreneur and tech enthusiast dedicated to helping startup technology companies get the direction and momentum they need to succeed. As the founder of Build. Brand. Blast., Jose has established a collective resource for tech entrepreneurs to consult when brainstorming, creating, launching, or expanding a new business. Jose is also the founder and CEO of Quez Media Marketing, a marketing firm that combines technology and creativity to help new and growing companies get the results they need.