Target Global: Is Now the Right Time to Expand Your Business?

Uncertainty clouds the global economic outlook for the remainder of 2025 and beyond, but corporate leaders as a whole feel more optimistic today than they did earlier in the year. A June poll of large-company executives found less than 30% expect a recession this year, down sharply from nearly 50% the previous month.

The apparent improvement in sentiment may have you wondering whether now is the right time to expand your business or enter new markets. However, experts caution that even in the best of times, growing a business carries significant costs and risks.

“The decision to expand your business, or to pull back, is a consequential one that’s not to be taken lightly,” says Yaron Valler, cofounder of Target Global, a European venture capital firm.

Zooming out from the present economic moment, experts like Valler say that business leaders should look carefully at the current state of their enterprise before choosing which path to take. If most or all of these conditions are present, it may be time to grow.

Your Current Team Is Operating at Full Capacity

If your workforce includes lots of hourly workers who qualify for overtime, you’ll see this show up in higher overtime incidence and higher (or at least more variable) overtime expenses as a rule.

“If you’re seeing significant variances in your projected and actual figures for this budget line item, you want to get things back on track before your business starts to experience more repercussions,” says Gusto’s Barbara Neff.

Often, that requires hiring a new employee, or several, Neff says. Reducing overtime expense might not pay for that employee outright, but you’ll see operational benefits regardless.

Your Products Are Gaining Traction in the Market

“Growth at last” is a good problem to have. It is a problem nonetheless. Indeed, rapid sales growth requires urgent action to ensure that it remains a tailwind; it takes only a few dissatisfied customers to quash momentum and do lasting damage to your brand.

Investors Want to See More (And Higher Returns)

Sometimes, you must grow to appease your investors. Early-stage investors may expect returns as high as 10 to 15 times their initial investments, and even later-stage capital may ask for three to five times principal, says Ajim Capital.

Such expectations are not sustainable without an ambitious plan for growth, at least in the near term until you can secure a favorable exit. If this is your first time running a high-growth enterprise, you may need to recruit high-level employees who can help navigate the “hockey stick” period (if your investors haven’t provided them already).

Competitors Appear to Be Gaining an Edge

Unlike the above, this is a negative signal, a sign that you need to make changes now to ensure your company remains viable moving forward. It’s important to develop market intelligence capabilities in the first place or be prepared to pay top dollar for actionable information. And it’s equally important to have a “quick turn” execution strategy in place to capitalize on it.

Grow or Pull Back?

To determine whether it makes sense for your business to grow right now, you can first assess whether these conditions apply to it.

If they don’t, you can most likely make do with what you have currently, especially if you have concerns about the economic outlook. If they do, that’s not quite the end of the story. You’ll need to take a deeper dive on the financial health of your business, among other factors, to confirm whether expanding is a wise move.

Remember, as Target Global’s Valler says, this is not a decision to be taken lightly. Take all the time you need to get it right.