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When to expand your business is one of the biggest questions on any small business owners' lips. When you start a business, of course you want it to be the biggest and best possible, with hopes of early retirement and possibly a lasting legacy that can be carried on by your children. However, expanding your business too quickly can often lead to you losing it more than growing it.

It's a difficult decision to get right - while growing too quickly can lead to financial and stability problems, taking too much time might see you missing out on important and extremely valuable opportunities. Therefore, knowing your strengths as a company and your place in the market will go a long way in helping you decide if it's time for your small business to expand.

Here, I've listed five factors you should take into consideration before deciding on whether you should expand or not.

Marketplace
One of the most important factors in your expansion plans will be how the marketplace in your industry is performing. Take the current situation with the US dollar - poor performance abroad has left the dollar in a weakened state, and this is having a major negative impact on the US manufacturing industry. If you're in manufacturing, you may find that this would be the wrong time to expand. Therefore, do you need to find new markets if your existing one can't support you? Can you attract new customers in a difficult marketplace? These are just some of the questions you need to ask.

Your bottom line 
Can your small business afford to expand? Make sure you're not blinded by images of larger profits and more sales - first you need to know whether you can afford to or not. For instance, how much extra capital will you need? Does your expansion need more staff? Will you need to move premises? Will the additional costs be covered by your planned increase in income?

One thing that you don't want to forget is your current customer base. After all, they're the ones that have made you successful enough to think about expansion in the first place. Ask yourself whether they'll be affected by the expansion - will service levels drop, or will there be raised prices for your product or service?

Your suppliers
When your business is just starting out, you will obviously use what you can afford. This will often mean suppliers that are meant for small businesses. With your expansion, will these same suppliers be able to keep up with your increased requirements? The last thing you want is to attract bigger customers and then not be able to meet their demands - a sure-fire way to early failure.

How does it affect you?
Perhaps the biggest change is the one that expanding your small business is going to place on you personally. Obviously it's going to take up more of your time in the initial process, but what happens after that? Will you need to spend more time at work and away from your personal life? Will you be prepared to sacrifice your personal or family life for your expansion?

These are just five areas I've looked at. Something else I would recommend is re-evaluating your original business plan when you first started your company. Any changes that you need to make when growing from a small to medium business can often be found in your business plan. Also, speak to the Small Business Association, or the relevant government association in your country. They have a wealth of advice available on expanding your small business.

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