Post a new topic
    4 Replies Latest reply on Jul 28, 2011 5:22 PM by artforart

    When is it the right time to expand?

    artforart Wayfarer
      Having been a member of Small Business On-line Community for several months does not make me an expert or even knowledgeable to ask questions because I have been looking at my own area of expertise thinking we are doing very well under the circumstances and accessing stability more than growth as the determining factor of success. Just being a 501 c 3, non profit, does not mean we are not in business, or generate money, but it does mean we must adhere to IRS guidelines that can be tricky to follow if not up-dated or have a full time staff doing nothing more than keeping your preverbal nose clean, or an account working pro bono. Stability is good in any business but when it becomes the status quo, and the business is not producing to its full potential there comes a time when the thoughts of expanding comes across the table. The excellent Artical, Reassessing Your Business Plan, has caught my attention more than once and while I have been looking at expansion rather than the status quo the numbers point to debt paybacks which are contingent on marketing sales. I have been working with SBA SCORE, but actually submitting a proposal to any lending institution one would like to have all his ducks in a row; therefore, I am looking at our actual holdings verses expense to expand and trying to come up with a number, but the new marketing and sales is unproven - I mean it looks good, but so does the water before you jump off the deep end. Demographics are hard to figure because you have no idea how your pre-advertising is going to hit. Am I just too conservative and need proof, or know what the consequences are if I am wrong? Where is the point of no return, when you actually get Board of Directors approval, or when you make your frist draft on your loan? I'm sorry but I like to see progress and when nothing is actually happening with your investments I think it's time to start looking foward. artforart
        • Re: When is it the right time to expand?
          countryboy Wayfarer
          I think It and how you looking at it.If your looking for a sure thing. That not likey to happen .But if you do have facts to back you up and to belave the compamy is ready.Then sleep on it. step back look at it twice. It a big step. Only you rely know if it right .I down to earth fact is that not many people can say if it right. For your or your company.Just the one that are in business with you may help.Yes I know there company out there tha say they can .but That is a diffrant forum .
          1 of 1 people found this helpful
            • Re: When is it the right time to expand?
              artforart Wayfarer
              Countryboy: That is about as clear as mud but I appreciate your responce which does have my best interest to heart, but it is quite obvious that my indecision has caused doubt that my plan has not been well thought out, and that by sleeping-on-it, things might mysteriously evolve into a revelation which might set my mind at ease. I know it is difficult for our Small Business Community to take serious any enterprise directed from such an obscure location on the globe, and many who have done the research might discern we do business in cyberspace, therefore do not exist at all. Both are somewhat true, but not altogether, for we have facilities, a product, clients, bills and expenses. It is not a matter of do we expand, but when is the right time to expand? Generally we answer that question when product sales are over coming our shipping abilities; or when our office space is no longer adequate, our techno equipment is out dated, we are loosing touch with innovations in both creative product and marketing. We join Small Business On Line to get in touch with reality and what is new, or happening, we share some of our administrative expertise in non profits, and the best the Community can do is tell me to sleep on it? Excuse me, I was not born yesterday: and some will say, well there's the problem. An Old Man trying to send cold soup back. Just for an example: a=150k plus, b=1.2M plus, c=status quo income, and x=cost of expansion: what portion should be invested when x is estimated to be less than 250k and the expansion shows sufficient growth to pay back x; But, the stability will be in question until final completion of the expansion phase? Yea, I've been sleeping on that one for quite some time. Everybody seems to have the answer, but in the short term, their answer is costing me off the top of my (a) capitol, with no evidence the idea will actually work. I've bought into some of these brilliant ideas, but see nothing happening. The Ace in the Hole, as I see it, is: b, product inventory. Shake that loose, and I will be giving advice, rather than asking for it. artforart
            • Re: When is it the right time to expand?
              artforart Wayfarer
              I realize that the final decision to either expand or remain status quo will depend on my current administrators, who for the most part would like to see an increase in revenue but their conservative view on the overall concept of our organization leaves them with a neural opinion, and the expansion would chart new territories that I am not even sure I am comfortable with. While the natural path most non profits take is in grants; community support; and donations; these avenues have been rich in advice, promises, and the regretful letter at the end of a six month extensive search and proposal writing enterprise that has depleted our base financial reservoir - which can be use as evidence of our faithfulness and may even look good on our long term tax requirement. But at some point in time I must start looking at our real estate investments as potential for a business venture which might press the organizational concept, but prove useful in providing much needed financial resources. I have been in contact with SCORE, but have a most difficult time identifying with the projected business, which is the expansion project I've been concerned with, because in effect, it has little to do with art, and everything to do with business. I can estimate the cost for a business start up by following the procedures given to me by SCORE, but it is most difficult for me to estimate profits because I have nothing to base them on. Since our non profit has stabilized with utilities; taxes; and office supplies; and we have no wages paid out; our current income has come from benefactors, small donations; and volunteer workers. I can figure the cost of additional employees, the additional cost of communications, insurance, utilities, even to some degree the cost of additional equipment and services, such as credit card acceptance, which beforehand was unnecessary. The general consensuses between all members of the board and to some degree the community, is for a Bistro/Gallery; Convenience Store; Starbucks type situation; Coffee, Pop, light refreshments; Hot Dog Stand; all in keeping with the original Historic Building where this business will be located. Innernet Cafe has been suggested. The problem is defining the demographics to a rather unique location, thus the problem in estimating clients, profit projections, and return customers. Quite frankly I am most optimistic our current population would carry the risk, but I guess I am trying to edge my bet, because no doubt additional money will be required on top of our current investment capital and I would like some assurances that a profit can be expected, and which venue would be more successful in meeting our goals. Does any of this make sense to anybody in our on line community, or should I just go back to grants searching and hope for the best? artforart
              • Re: When is it the right time to expand?
                artforart Wayfarer

                I think I have about talked this subject to death, so my assumption is that nobody can give any valid advice, or it should be so obvious when expansion is necessary that it is a no-brainer. Rather than keep this question on the books, allow me to say I've slept on it, and therefore took the advice of countryboy, and the next time I have a serious business question I will keep it to myself. artforart