Is Now the Time to Expand Your Business?

For most entrepreneurs, the drive to keep growing a business is in their DNA.  It’s instinctual. It’s not a question of knowing whether to do it. It’s a question of knowing when—if ever—to stop.

In theory, growing your business will make you more profitable thanks to “economies of scale” such as:

  • Spreading core infrastructure costs: Every business is going to incur certain core infrastructure costs—e.g., office space, equipment, marketing/advertising. Spreading these core startup costs over a larger sales base is a key way to achieve early profitability.
  • Discounts: Growing larger makes you eligible for purchasing discounts that can significantly lower your costs on things like supplies, raw materials, business services (e.g., security).
  • Pricing resilience: With a larger business, you are better able to absorb variations in pricing and defend your business against price-cutting by competitors.

It’s easy to get excited about the economies of scale, especially when real estate agents, suppliers and perhaps even customers are cheering you on.  But it’s worth it to take a second look. While economies of scale are real, when your business will really be able to benefit from them is another question.

If you decide that it is time to add more locations, keep in mind that your office communications can make it easier than ever. For example, Avaya IP Office, a popular communications solution for small and midsize businesses, lets you share resources (i.e., messaging and a receptionist) between offices, significantly lowering your overhead. It also gives you options for more cost-effective sales coverage: if one office is closed, calls can be seamlessly diverted to the office that is open (callers won’t even notice).

You can also administer an Avaya IP Office system from anywhere there is an Internet connection—another way to reduce the costs of having multiple offices. That means if you add an employee or change the way calls are routed at one location in your business, you can easily make the change at another location.   You can get more information about the multisite options in Avaya IP Office at http://www.avaya.com/usa/resource/assets/factsheet/ip%20office%20preferred_lb4317.pdf

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About Vic Levinson
Telecommunications and IT professional with over 20 years experience in Business Telecommunications. Specializing in voice over IP (VoIP) for business: hosted VoIP, business VoIP phone systems, SIP providers, carriers, T1's - the works. Founded Prime Telecommunications in 1993 and providing business communications solutions. Cloud Applications- everything from hosted network security, hosted Disaster Recovery, hosted printer management, data centers and colocation solutions for businesses.

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