Expanding your business to a new location is a task fraught with risks and potential complications. However, going into the task prepared can help ensure it goes as smoothly as possible. To help you make such preparations successfully, we have prepared a list of things to consider before you open a second location!
Do you have a stable customer base?
The first of things to consider before you open a second location is your customer base. First, you need to ensure that your customer base in your primary location of business is stable and prospering. Remember that customers are, of course, the very basis of any business. And you will need a lot of funds to get your second location up and running. It is unrealistic to expect it to immediately become profitable, either. Which means that you will be depending on your current customer base to see you through the initial tough period of expansion. Similarly, you should at least make some tentative forays into other markets. If you already have some presence in the location you are planning to expand into it will be a lot easier to succeed.
Have you done the proper research?
Of course, these forays into other locations should serve to help you do one thing: market research! You need to make sure that your business would be well received. If you choose to expand into an area which is either already saturated with the goods or services you offer, then you would not be able to pick up steam and would only atrophy funds. This is why you need to ensure that it is potentially profitable and that it has potential for future business operations. Do not be hasty at this step, either. Ensure your teams have all the data they need and that it is analyzed to perfection. This is, after all, what will make or break your expansion.
Do you have suitable employee candidates?
If customers are the base of business, then good employees are what you need to properly tend to that base. Which is why one of the most important things to consider before you open a second location is who you will be sending to work there. Of course, it is perfectly possible and even preferable to hire most of your employees from the area. However, this also means you would not be familiar with them, their work ethic, or even their potential for future promotion and excellence. This is why you need to at least send a manager from your main location to oversee the working of the second one. And the selection of such a person is not something to be taken lightly.
Have you chosen a good location?
Of course, once you’ve decided on an area you want to expand into, done your market research, and even decided on who to send there, the only stumbling block left are facilities. You need to make sure that your new place of business is in a good location that can fit your purposes. If you are opening a store, then it needs to be in a busy area with plenty of consumers. If you are opening a second office, then it needs to be in a location with good services that is easy and convenient to travel to daily. Naturally, good facilities can be expensive. So keep in mind, of course, that there are mistakes in mortgage shopping you need to avoid! Getting yourself into debt in an attempt to expand would be disastrous.
Are you finances in a position to support expansion?
Speaking of expenses, one of the most important things to keep in mind is the financial robustness of your business. It is all well and good to have just enough money to go through with the expansion you have envisioned. But always remember there is a litany of small expenses that can throw off your predictions if you do not give yourself financial leeway. The moving experts from gibraltarvanlines.com warn that this happens very often during moves, too! People focus on the large expenses and challenges, forgetting small things. Buying moving supplies is as important as paying movers. And paying for a property to expand into is as crucial as accounting for salary differences based on the city’s standards.
Do you have the proper resources to support a second location?
Another of the things to consider before you open a second location are the resources you have available! And here, we aren’t talking strictly about funding. You might believe you are ready to expand based on your current figures. However, consider this: do you have what it takes to withstand an increase in business? Consider this for a moment: You expand, and the demand for your goods or services shoots through the roof. Do you produce or regularly secure enough goods to handle the increase in demand? Do you have enough teams to provide the services your customers are clamoring for? If you are scrambling to make up for missing products in such a scenario, it is easy to fall into some of the common mistakes with spending to avoid for business owners. Which, of course, would mean losing a lot of the profits you had been counting on.
Can your current mode of operations be transplanted successfully?
How to move your business to another state and ensure you have a smooth process throughout does not depend only on physical movers, logistics, and expansion viability. Another thing to keep in mind is what has made your business successful in the first place: The company culture, policies and mode of operation. Is it possible to transplant this successful model of doing business to the second location? Do the local conditions and mentally allow for that? If they clash too severely with what you are used to, it is easy for conflict between the two locations to ensue.
Do you have a solid strategy for the expansion?
The final of the things to consider before you open a second location is the strategy you are going into the venture with. Know how you want to approach the customers. The way you want to build up your brand name. Even the mundane details, such as how to choose long-term self-storage for your goods and equipment is important.
Keeping all the things to consider before you open a second location firmly in mind, you should be able to get through your expansion more easily! Just remember to always be objective, and never rush through the process.