Opening Multiple Locations

If your business is performing well, you may be contemplating opening up another location. Before taking the plunge and expanding, it’s important to understand all the components that go into having an additional location so you can determine whether this is the right decision for you to make.

Signs that you should open a new location

You want to make sure your business is fully ready to have another location prior to taking any major actions. While you may not be able to know for certain if expanding your business is the best route to take, there are some clear signs that can help you decide to move forward in this process. According to Jared Hecht, guest writer for Entrepreneur, it’s a good idea to ensure you have enough money to afford to open a new location before doing so. You may need to pay for new inventory, new equipment, rent, insurance, payroll and a variety of other expenses when expanding.

Marcia Layton Turner, contributor to Forbes, also notes that your particular conditions can indicate that it’s time to open another location. For instance, if your business is consistently at maximum capacity, having an additional location could allow for further growth. In addition, if you have set milestones and are already reaching these goals, your business may be ready to expand.

Guidelines for selecting a destination

Once you have chosen to add a new location, you then need to pick a destination for your business to move into. According to Scott Allen, former writer for The Balance SMB, it’s wise to consider how the site will impact your customers, your employees and yourself. Allen suggests thinking about how convenient and safe it is for your customers and employees to reach the new branch. Depending on the area, parking availability in particular could affect customers’ willingness to go to the location.

If your business has any specific facility requirements, Allen recommends selecting a location that meets these needs. Before signing a lease, Hecht also says to explore the area to learn more about your potential customers and to see if the area has the same level of prestige or a similar reputation to your current location. The information you gather about the area can help you determine if your business would fit in well there.

Steps for your success

To open a new location, there are several steps that your business needs to take. Thomas Smale, contributor to Entrepreneur, advises that you first set clear objectives for the expansion, whether they be to better meet demand, reach new customers or acquire new talent. According to Smale, you also want to do your best to replicate the factors that have made your business a success in your original spot. Once you have identified these, you can then develop a plan that details what needs to be accomplished by realistic deadlines. No matter what the process of opening a new location looks like for you, Smale says it’s important to keep your goals in mind and maintain your company culture as you enter a new market.

There are a lot of potential benefits and drawbacks to opening multiple locations. Speak with a business advisor to discuss your specific options.

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