In some cases, a startup finds a sweet spot for itself in the market where it’s allowed to function at its current scale while remaining profitable. It has a niche of its own, where the customer base is wide enough to fuel its expenses, while also yielding the target profit. In such a scenario, expansion isn’t a must. But, as you might imagine, this is a desirable situation which not all startups are blessed with.
Many startups end up spending too much money, time, and resources on maintaining the initial line of revenue they’ve secured, while neglecting lucrative chances to grow. Then, as the company employs more staff, and expenses rise, the revenue no longer provides enough cash flow to support it and the startup fails. Failure to expand geographically kills 9% of the startups on average.
In most cases, a startup will need to expand its operations. It’ll need to acquire new resources and create more products, and it needs to do it fast. There’s a pressure to be quick with growth because the competition is right around the corner, waiting for opportunities to outpace you.
The best way to plan out your short term and long term goals is to optimize the startup’s efforts to reach desired targets, while also raising the bar accordingly. This means geographical expansion should be in close sights for any up-and-coming startup that has established itself in the market initially. While already in a profitable position, a startup can take small steps to expand its horizons without any risks involved. This translates into a desirable growth pattern that makes sure your startup is here to stay.