If you own a contracting business, chances are you’re a busy person with a lot of tasks to manage. Whether it’s overseeing a construction project, purchasing materials, investing in equipment, or making bids on future projects, the responsibility of all of these tasks falls on the contractor. As a business owner, you have many more challenges that span well beyond project management. Regardless of your day-to-day tasks, the primary goal is to maintain a successful business.
If you have enjoyed success as a small business owner, you may be considering expanding your business. In this five-part article series, we will discuss ways you can expand your company and whether or not a bigger business is better for you. Remember, a Knoxville contractor lawyer is here to assist you with a variety of crucial tasks for your construction business.
Are You Fiscally Ready to Expand?
It should be no surprise that the decision to expand your construction business begins with the bottom line. Is your company steadily bringing in more and more profit? Are you getting consistent work on lucrative projects? Are you creating a backlog of projects to work on in the upcoming months? Of course, if a company is only having middling success, it’s best not to consider expanding until increasing your profit margin.
Ways You Can Expand
The two ways businesses generally grow is either by expanding the existing business or acquiring another business:
- Expanding Your Existing Business: Most contractors that expand their business do so by slowly scaling out their company within the area they established their company. As their business steadily grows, they can slowly increase their services without taking any extreme risks in the process.
- Acquiring Another Business: By purchasing a business in a different city, although this location may be unfamiliar to the expanding business, the company has the opportunity to tap into a new market by investing in an established company in a new location that provides similar services.
When acquiring another company, it’s critical that you closely assess the business and their local market. It’s also important that you invest in a company that specializes in similar services and operates a lot like your business. When you invest in an established business in another location, you avoid increasing the competition in that market. You also can defer some important responsibilities to the business you acquired as they know their market. It’s always ideal to partner with a company that has local knowledge and a track record of success in the area.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.