Business Expansion
Considerations for business owners ready to expand
By Justin Adducci
Business Banker
Each business owner I work with as a business banker at North American Banking Company has had their own individual reasons for expansion. Some have needed to acquire equipment for a new opportunity, while others have needed more space to add-on or move into a larger space.
Business owners who are looking to expand should contact their banker as soon as possible in their planning process. Our experience can help you navigate the process and can create an effective expansion plan for your business.
Below are some of the issues I often discuss with my customers that are planning for expansion.
Determine what you need for your expansion
Figure out what your needs are for your business and then we can work on your expansion plans together.
Plan out when you need it and how long it will take to be operational
Let’s say your business needs financing to set up an additional assembly line. You’ll need time set up the financing, acquire the equipment, and put it in place before it will be operational. Make sure you build this operational set-up time into your plans, along with a buffer for the unexpected.
Determine hiring impacts
In our current tight labor market, it can take weeks or sometimes even months to hire skilled labor. If your expansion requires additional employees, make sure you either have the required skills within your current talent pool or develop a plan to hire the employees you need.
Loan or lease?
If your expansion requires acquiring additional equipment, do you need to purchase it or can you lease it? At North American Banking Company, we offer a variety of lease options for equipment, some of which require very little initial upfront investment.
Plan your payments and cash flow impacts
Lastly, I suggest working with your banker to plan your loan or lease payments, knowing that your expansion expenses may not be recouped for months or even years.
As we continue to emerge from the effects of the COVID-19 pandemic and face increased pressures of a tight labor market, inflation, and rising interest rates, expanding a business requires careful planning and strategic vision.
If I can be of service to your business during your expansion planning, please do not hesitate to contact me.
