Research expansion capabilities before initiating growth
As the trucking industry distances itself from last decade’s downturn, businesses are once again looking to expand.
Aftermarket expansion typically comes in two forms — the addition of new services and products to existing facilities or the opening of new locations.
The latter offers aftermarket businesses the opportunity to increase market share and improve customer service by strengthening overall business reach and availability.
When implemented correctly, facility expansion can be an incredibly profitable endeavor. But it’s not easy. Expansion takes careful planning, research and execution.
So if you want your business to expand, it’s time to sit down and start studying. Expanding your business is a final exam you must prepare for to pass.
Below are four important questions to answer before expanding your facilities in the aftermarket.
Can you afford to expand?
This seems obvious, but it really is the most important step in establishing an aftermarket expansion plan.
Expanding your business without looking at your financial capability for growth can be a crippling mistake, says Tom Marx, CEO at Marx Group Advisors, LLC, an aftermarket business mergers and acquisitions consulting firm.
Expansion is an expensive endeavor that requires a large upfront capital investment and patience to withstand early growing pains. It’s not uncommon for new facilities to take months, sometimes years, to turn a profit. A business that initiates an expansion unaware of those costs and risks is at a significant disadvantage, Marx says.