Three questions every SME should ask before expanding

FOR MANY entrepreneurs, growth is seen as a clear marker of success. However, for South African SMEs, expanding too quickly or for the wrong reasons can slow momentum and dangerously overstretch resources.

- NICOLE SWART

Growth shouldn't be a leap of faith, but rather a strategic move grounded in data, operational readiness, and sound financial planning.

Every business owner wants to grow, but not every business is ready. ‘We've seen entrepreneurs double their stock, hire additional staff, or open new branches after just a few strong months - only to find themselves overwhelmed. Growth is exciting, but it’s also costly. Without the right foundation in place, it can unravel the very progress you've worked so hard to achieve.

Merchant Capital works closely with entrepreneurs and SMEs to support sustainable growth and has outlined three key questions every small business should ask before committing to expansion.

1. Is there enough consistent demand, and will it grow if you offer more?

Many SMEs mistake a short-term spike in sales for long-term growth. Whether it is a seasonal bump, a tender, or a once-off corporate order, short bursts of revenue can be misleading. Entrepreneurs must look beyond the moment.