Is It Time to Expand Your Business?
September 15th, 2017
If your business has been successful, you might be considering expansion. But it can be tough to know where to start. In Industry Denver, a collaborative working space that’s home to our Colorado-based commercial bankers and 80 innovative businesses, we get questions frequently about what factors to consider.
First, look at the initial investment and what the return will be. Expansion takes time, money and energy; do you have the resources you need to handle it? We often see companies expand to grow top-line revenue but sacrifice margin – resulting in extra work and little profit. Don’t make the same mistake.
Second, while expansion might be on the horizon immediately (or in the near future), it’s important to map out your long-term plans for the company, too. These plans should guide financing decisions. We typically recommend matching short-term financing with short-term assets and long-term financing with long-term assets. Make sure you have the required assets available.
Finally, engage your commercial banker early in these discussions. Though this might be the first time you’re navigating an expansion, it’s not for us. Let us help assess the opportunities ahead of you and pass along potential pitfalls to avoid.
This edition of Market Momentum was written by Bank SNB Colorado Market President, Matt Cassell.