Before You Add a New Service or Location, Ask These 3 Questions

Growth is exciting, but it’s also expensive.

At Baker CFO Advisory, we’ve seen many businesses add new services or locations before they were truly ready. Sometimes it works. More often, it exposes cracks in the business model that could have been fixed with better planning.

If you’re thinking about expanding, here are 3 questions we recommend asking before you commit

1. Can Your Current Business Support the Next One?

Adding a second location or service line means one thing: your current business has to carry the weight while the new one ramps up.

Ask yourself:

• Do we have enough working capital or cash reserves to sustain a slower ramp?
• Can our team maintain current quality while onboarding something new?
• Will this pull attention away from what’s already working?
  
  

Expansion isn’t just a question of potential. It’s a question of capacity.

2. Is This Growth Aligned with Demand or Just Ambition?

New offers and locations work best when they serve proven demand. Before expanding, check the data:

• Do existing customers keep asking for this?
• Have you tested it in a smaller format first?
• Is the revenue model profitable, not just appealing?
  
  

Ambition is not a substitute for market fit. The more you know about how this growth ties into your core business, the better the outcome.

3. Do You Have Financial Visibility to Manage the Risk?

The biggest risk in expansion isn’t the idea. It’s the blind spots in your numbers.

Before you launch something new, make sure you can:

• Track your breakeven point in both the new and current model
• Forecast cash flow with confidence across both streams
• Identify early warning signs if margins start to shrink
  
  

This is where CFO-level insight makes all the difference. Expansion isn’t risky when you know your numbers, and how to act on them.

Final Thought

The decision to grow your business should come from confidence, not urgency.

The right questions reveal whether your business is ready to grow, or whether it’s time to reinforce the foundation before you build.