In order to expand your business, you need to be willing to take some risks, but only after you’ve carefully considered the costs and benefits, the Small Business Computing article “How to Take Smart Business Risks” explains. Here are three questions that will help you assess whether a risk is worth taking or not:

1. Does my idea fit in the context of my current business? Random expansions are rarely smart moves.  The first qualification for any idea for expansion or change is that it’s compatible with your current business offerings and fits well with your brand and image.
2. Does my idea fill a want or need? Proper market research is the first step for any new initiative. There may be demand for a new product, service or location in your eyes, but the general audience may feel differently. Small Business Computing contributor Maryalene LaPonsie suggests the following additional questions to start: Are there competitors offering the same product or service? Do these competitors have a weakness that you can exploit? Is there an underserved customer base or geographic region that could benefit from your proposed product or service?
3. Will my business survive if the risk doesn’t pay off? It’s good to be optimistic, but it’s necessary to always consider the possibility of failure. Make sure you know your financial standing and where you will stand if your new endeavor flops. If your business cannot withstand a failed attempt, it’s most likely not worth the risk.

Click here to read the article from Small Business Computing.