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Tips for Opening a Second Location of Your Small Business

Small Business

For many small business owners, having a second location is the ultimate sign of success. It may even be the main goal. Having an established business that can do well in a second location involves a lot of moving pieces, and it can be easy to let something important slip through the cracks. If you think your company may be in need of a second location, here are some tips to consider.

Define Your Goals

Before you invest a huge chunk of cash into your new location, you need to define your main reason for wanting one in the first place. Do you want a location closer to your employees? If you’re trying to make some new hires, more populated areas with universities will likely have some recent grads that would make excellent additions to your team. Some companies can’t handle current demand, and they need a new location as an expansion just to keep up. Other companies see a market no one else has utilized and think their business could be the perfect fit. Don’t open another location just because it seems like the thing to do, at least not before you’re certain your budget can handle the expenses and possible losses.

Invest Wisely

Double the locations means double the expenses. You’ll be paying more for utilities, your personal liability coverage, stock, and more. Do you want to rent your new facilities, or are you looking to buy them? What about equipment? These essential decisions will impact the length of time it takes to get the new location up and running. Will your main location be able to spare your full attention for that long? Your first location shouldn’t suffer because you’re shifting priorities. If the main business struggles, what’s the point of a second location? Know where you’re putting your time and make sure it’s worth it. This is also a good time to negotiate with your suppliers. You’re going to be making larger orders, so you should be after a lower price.

Try Online First

If you haven’t tried opening an online shop, do so before you try to pursue an entire secondary location. So long as you have the space to handle additional orders, you can further meet customer demand and get an idea of what it will be like dealing with a larger volume of orders. Plus, you’ll be able to send products right to your customer instead of having them drive to you. Once you decide you’re ready for another location, keep your online store active. Online discoverability is crucial for businesses today, and you’re leaving money on the table by not selling online.

Know Your Competition

Know your competition before you try finding another location. A successful competitor can be indicative of demand in an area, but you may not want to encroach on their territory unless you’re confident about succeeding through a little opposition. You also need to consider whether or not you really want to start a rivalry. It’s a part of business, but there are ways you can expand while still being respectful.

Determine Your Leadership Structure

If you’re spending all of your time running one business, it’s not realistic for you to run a second location as well. If you try to, chances are both will suffer, which means you need to nail down your leadership structure and learn to delegate. Will you hire managers to take some of the load off? How will you train new employees? Will the training at the new location be different? How? Will training time impact your opening timeline? These are all big changes that you need to anticipate ahead of time.

A new location is an ambitious and exciting goal, but twice the business means twice the responsibility, and it’s important to manage your stress. With the right preparation and a clear view of your future goals, you can start this project with confidence.