“There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new system.” Machiavelli You are having a great year. Sales are up, your checking account balances are growing, your bills are going down- now what do you do? Do you follow the advice of many books and programs on entrepreneurship that urge you to look for new business opportunities, claiming that you must grow or wither? Such advice urges you to watch out that your competition does not get the jump on you and that you must think about new locations, new markets, and new products before someone else does. Such advice can make you uncomfortable. It can raise feelings of guilt. It can instill fear that you will lose out. If you are susceptible to such emotions dancing about- clear headed planning and caution can be side tracked setting yourself up for a major blunder. The crusty old New Englander natives had a point with their favorite sayings of “if it is not broken, don’t fix it.” Or “leave well enough alone.” In other words, change is not always in your best interest. There are many small businesses that remain small by intent. They spin off a healthy cash flow; the owner enjoys a nice lifestyle, and the pressures of business are manageable. Such owners do not believe that more is always better. The pressure to expand can bring down a profitable business. The need to be a “bigger” player can bring on additional debt and expense driving up your break-even point to risky level. Yet, expansion may be the correct action ---- but how do you know? If your feelings, yes feelings, are driving you to expand, why? If you see opportunities that will stand scrutiny and analysis along with some strong negative assumptions to offset your wishful thinking –it may make sense. Whether it is a new product, a new store, a new market, or new equipment, it only makes sense if you will earn more profit or cut your expenses. And that determination is based on your powers of prophecy. You must ask and demand an honest answer of yourself: “Is my sales forecast for real?” Or are you fudging it so you can do what you want- regardless of reality. There in no getting around it, successful business expansion is wrapped around two important ingredients. Your ability to predict the additional sales from your expansion. Not hope or hype, but realism is important-miss your forecast and you may expect unplanned losses and a cash drain. The other ingredient is expense control and planning. Your expansion plans mean more people, more overhead and assortment of expenses than can be a cash- eating black hole. Before you jeopardize all you have worked for, test your thinking and ask some tough questions of yourself. 1. If my predictions are off, what will happen to my business if my forecast is half of what I think it will be? Will my supposed profits turn to losses and bills I can’t pay? 2. Do I have the people resources? Success requires more than financial resources. Do you have the staff that will allow you to expand? 3. Can I handle the additional stress and worry? 4. Will bigger bring me the sense of accomplishment I am seeking? Or just more problems? 5. What is the disadvantage of my doing nothing? Be cautious, plan for the unplanned problems. Use the Ben Franklin approach; list the advantages and disadvantages of your plan. If the advantages are predominant, move ahead. Don’t rush into any expansion plan. Many a failed entrepreneur regrets the day that dreams of joining the Fortune 500 clouded his or her judgment. Success combined with unrealistic views of the future can be a deadly combination. What happens to most gamblers when they are on a winning streak? In time, they give it all back to the house. Success in business can do the same. In time you may start to think you have the magic touch, your judgment is infallible, and you are the most gifted entrepreneur you know—if I have touched a nerve- it is time to be cautious. As I was making notes for this column I checked the internet on the subject of business expansion-two topics popped up frequently- how to raise money through debt to expand, and over expansion – too much too soon- as “the” prime cause of business failure. So as you peer in the metaphorical crystal ball planning your future riches, think of Francis Bacon’s comment about predicting the future “Man prefers to believe that which he prefers to be true” Or, we are good at self-deception and the most gullible customer of our own salesmanship. Copyright 2003 Dr. Paul E Adams, Professor Emeritus Business Administration Ramapo College of New Jersey Author “ Fail Proof Your Business: Beat the Odds and be Successful.” Available Amazon.Com. If you have questions or comments- contact me: drfailproof@earthlink.net