Rapid Expansion Capital

Rapid Expansion Capital

This is used to enlarge the size of a business through a variety of methods. Expansion financing can be used for internal growth, acquisition of new customers, or even launching of new products. In its most simple application, expansion financing is used to increase working capital or productive capacity to facilitate growth.

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• Any spending or action to increase the size, sales, or profits of a company.

• Typical needs include equipment, physical space, purchasing inventory, hiring employees, and working capital.

• Research into how to grow a business should be approached through careful market analysis and planning.

• Expansion should be considered whenever the opportunity arises to grow the business in a way where the costs of doing so would be less than the profits made from expanding.

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What Is Business Expansion Capital?

​Growth is supposed to generate additional sales and profits, right? While true, an increase in sales is typically not seen until an increase of current assets. Assets such as inventory and fixed assets like equipment. Sometimes these expansion opportunities are planned for long in advance while others can be a spur-of-the-moment ordeal.

 

Expansion Capital is Crucial 

Business expansion is any spending or action to increase the size, sales, or profits of a company. An increase in size can come in the form of capital investment as well as hiring new employees. A business will generally look to expand when they have a strong enough system and business infrastructure to support the projected increase. 

 

Another important key to expansion is the company’s customer base. Not just with having a solid following to help during the high-growth period, but also to ensure that the customer base continues growing during expansion.

 

Can Your Business Afford to Expand?

An important question every business owner asks themselves when wanting to invest capital into development. When money is invested into a business for expansion, at the end of the day it needs to be ensured the expansion was worth it. Proper cash flow analysis and planning projections should be taken care of prior to expansion to ensure all needs are met.

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When Is It Worth Expanding?

​Gut feeling answer: there should always be some pressure applied to the gas pedal. 

Real-world answer: whenever the opportunity arises to grow the business in a way where costs of doing so would be less than profits made from expanding. For example, a business finds itself in a position in which hiring new employees will increase operations and efficiency. 

 

This additional staffing in turn could lead to an increase in sales due to the expanded workforce. Maybe a retail shop can increase its size by building out its storefront. This would then allow for an increased number of products on display which could drive more sales.

 

Final Thoughts

​Every business wants to grow, but the question is when. Through proper analysis and planning, this answer can be determined. It's also important to remember that expansion should be considered whenever the opportunity arises to grow the business in a way where the costs of doing so would be less than the profits made from expanding. Not having the right game plan is a sure-fire way to stop any business dead in its tracks.