Every small business owner is eventually faced with the same tough question: Is it time to expand the company? However, picking the perfect time to grow isn't as easy as it seems. In fact, many conditions have to be aligned before more production can begin and additional employees can be brought in.

In order to cross the line between a start-up and a full-fledged small business, a financial plan needs to be in order. The decision can be made much easier with all the proper information, and that starts by looking through the entire company to determine if it truly is the perfect time to expand.

Analyze revenue, cash flow
Financial tips can come in all shapes and sizes. One of the best ways to make sure they are working is to carefully watch a revenue model and the cash flow. If these two aspects are strong, it may be time to grow a small business.

According to Inc. magazine, owners have to be confident in the revenue model before increasing overhead and scaling up the firm. This monetary element of the company needs to be predictable, so the employees can follow the cash. It helps to be able to point out which activity results in this much revenue, and so on. With good tracking measures in place, owners can be more sure of themselves moving forward. 

In addition, it helps to be able to predict profits and costs alongside revenue, the news source noted. Perhaps not enough small businesses do this well, which means it may be harder to predict when it is time to grow. A number of financial services can help the process along, and the more sustainable profits are the easier it will be to expand.

Does demand exceed supply?
While financial aspects are often clear indicators of growth, other factors could dictate that it's time to expand. According to Rhonda Abrams, a contributor to USA Today, work may be more than the small business can handle.

For instance, increased demand could signal the need for more employees. If consumers want the products, changes might have to be made in order to keep them coming back for more. That could include new locations, services or products. Any option might mean it is time to grow.

However, it is important for small business owners to remember the need for managers with a staff over 20 people, Abrams explained. Some leaders purposefully stop expansion here in order to retain a more hands-on approach.