OK, you’re on your way. If you had trouble in the not-so-great recession, it’s behind you now. You want to expand and do everything bigger and better, and that’s great, but do it the right way. The bankruptcy dockets are full of companies that we’re expanding.
When you consider expansion, make sure you have the basics in order before you start investing your time and money. Here are the basics.
1. SOPs–If you don’t have a well-organized set of SOPs (standard operating procedures), then you need to start here. These SOPs are important for the operation of your current locations as well as future locations. You may think that you’ve got it covered without a good set of SOPs, but when you see the difference in your company with SOPs, you’ll understand why they are so important.
2. How To Expand–You’ll need to decide how you want to expand. Do you want to build new facilities? Do you want to buy operating centers or schools? Do you want to buy your competition? Do you want to buy struggling centers for less money and fix them? Do you want to buy schools at the top of their game? Do you want to diversify the demographic you currently serve? Do you want to diversify so you aren’t so dependent upon a large employer in your area? Every question is important.
3. Business Plan—Have a well-organized business plan for yourself and for the bankers, investment bankers, private equity firms who will likely fund your expansion.
4. Financing—Get pre-qualified for the financing you’ll need. It’s not difficult if you work with people who know what they’re doing. Try to avoid the resident 12 year-old banker sitting at the lobby desk. He’s probably a good, smart kid, but you need experience—not someone who is filling out an application for you. If you have questions about the cost, options and availability of financing, see many helpful articles at http://bfsinc.net/category/buy-a-childcare-company/
5. Labor Market—Know your labor market. Finding good teachers and directors is always a challenge. Make sure you have access to these people especially if you are considering building facilities from the ground up.
6. Economic Changes: When everything is going well, it is very easy to feel like everything will continue to go well. Make sure you are measured and deliberate in your expansion plans. Make sure you can make the necessary adjustments if your expansion gets caught by an economic downturn. It’s not difficult to do when you plan ahead. It can be very difficult to do when you’re caught by surprise.
7. Professional Help—Engage your CPA, attorney and other necessary professionals in your planning process. Determine if your CPA and attorney have experience in these matters. A good team is better than a good leader alone.
As always, we hope you find this information to be genuinely helpful.
(Legal Disclaimer: Always consult the proper professionals before taking action. By and before the use of the information provided herein, reader agrees that BFS® is not responsible for viewer’s actions related to said information.)