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4 Crucial Things to Keep In Mind While Expanding Your Business

Running a business successfully is an amazing experience. There’s nothing quite like putting in the work and seeing your company thrive. However, sometimes there’s a limit to how much a business can do at its starting size. If you’ve hit this limit, you’re probably thinking about expanding.

The Padre Island Business Association is always proud when a local company decides to grow but knows the process can be fraught with challenges. We’ve put together this list of four crucial considerations when expanding your business. Take a look and keep these in mind as you take your company to the next level:

1. Tax and Legal Concerns

More often than not, expanding your business will complicate your tax process. Be sure to keep careful, detailed records of all your spending as you expand. You’ll be able to claim this spending, later on, lightening your tax load. You should also talk with a business accountant so you can fully understand your tax obligations as far as employees are concerned.

Moreover, if you haven’t already set up an LLC, expansion is the time to consider it. As your business grows, you’ll run a higher liability risk. When you don’t have an LLC, you take your business on as a personal liability. This means if you get sued, you could wind up losing personal assets as a result.

An LLC puts a layer of protection between your professional assets and your personal assets. Although you could wind up losing your business, you won’t lose your car or house. The registration process also helps you avoid lawsuits – for example, you’ll have to check that your business name is unique and, if not, change it.

2. Digital Security

Business owners can be tempting targets for hackers and digital scammers, especially during expansion. After all, bringing in new employees, buying or renting new real estate, and opening up new partnerships are all risk points for scams. For example, you might get an email from your landlord asking you to wire over a deposit, only to discover the email was spoofed and your bank account is compromised.

In addition to staying savvy while you navigate the web, you should be sure to use a device that has decent antivirus protection. Ransomware and other viruses are relatively common, pesky, and expensive issues business owners have to deal with. Prevention is always better than cure with these things, so build up a solid defense.

3. Budget Limitations

Expanding your business can be exciting, which sometimes leads to overspending. You don’t want to wind up taking your business to bankruptcy in an attempt to help it grow. That’s why you should set firm budget limits for yourself and stick with them as closely as possible.

Be sure to keep track as you go along. If you notice you’re starting to approach your spending limit in a particular category, take some time to evaluate the situation. You might realize you underestimated the true cost in those areas and need to retool your categories. However, you could also realize that you’re spending more than you really need to, and you actually just need to cut back.

4. Management Load

Any time you expand, you need to ask yourself: Do I have a large enough management team? Up to now, you may have been taking on the majority of the managerial tasks yourself. If you worked a home-based business or had a single location, this may have been fine. As you expand, however, you’ll need to find talented staff who can help carry some of that workload. Remember: You do not have infinite time or energy. Don’t stretch yourself too thin.

You can find managerial staff internally, or you can look to hire from outside of the company. There are pros and cons to each approach. If your work is highly specialized and requires a strong company knowledge base, you’ll probably want to hire internally. If it’s not, or you don’t have an existing employee who is skilled (or interested) in managerial work, you should look for a good fit from outside the company.

Expanding gives your business a chance to reach its full potential. We hope these tips help your company grow into all it can become! Do you need support as your business takes its next steps? Check out Padre Island Business Association for the resources you need!

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