Important Things to do Before Opening a Second Location for Your Business
Expanding your business to a new place can open new revenue opportunities. However, it should happen when your business is ready. It should also occur when you are ready. To know whether you and your business are ready, take time to go through the following things.
Show Cause for a New Location
Prepare an exhaustive answer to the following questions:
- Why do you want to expand?
- Are there alternative strategies that you can use to expand?
- Is it the right time?
- Do you have the resources to pursue this opportunity?
Sometimes, you don’t need to go to a new location; you can expand the existing business premises. You can also use the emerging technologies of e-commerce to serve a broader market. You need a concrete reason for expansion. The current business should be doing fine before you move to the next one. Also, extrapolate the future, when you have divided attention. Will the new location starve the existing business your leadership and resources? It is a real possibility.
Document Your Business Processes and Systems
Experts warn that only businesses with a replicable business model should open new locations. Small business expansion is an art of evaluating your systems and processes to see if they can withstand a culture shock.
Your new location comes with its fair share of challenges. Whatever soft skills you have gained over the years cannot guarantee success in the new site. Replicative customer experience will ensure results.
The new location will need new staff, new tools and equipment, and systems. You will need to map out all functions. Show how they will be done in your absence. In fact, take time off to see how they fare without you.
Prepare a Conclusive Business Plan
You probably have a plan already, but each business should always be handled separately. That way, you can know when the new location gains momentum. You can also tell if the new store is choking the parent outlet. So, a plan that details how you will go to the market is imperative. It should document new leadership challenges. And how you intend to handle them. Ensure that you have specific funding and marketing policies.
Conduct Comprehensive Market Research
You need to invest time and resources to make sure that the new location has similar demographics with the current ones. It should also have a replicable market profile. You don’t have to pick a place if it does not match your criteria. You can shop around for other locations. Sites that are not far off can be easy to manage, but they can compete with each other.
Prepare Funding Options
Choking your company is one thing that you should be wary about—it happens after expansion. If you don’t have savings, you may need that business loan from LendingClub after all. You can look for partnerships. You can also offer your employees an ownership opportunity in the new venture. That way, they will put in a great shift to ensure that the new location is a success.
Don’t be driven by the euphoria of temporary business success. Ensure that you have tested your business functions for some time. A single peak season is not enough to tell you to expand.