Many small business owners hope to continue expanding their business to make more money. While growing your business and opening additional locations may seem like an easy way to increase profits, taking on the responsibility of yet another business location is nothing to take lightly. If you’re considering this major step for your business, there are five very important questions to ask yourself beforehand.
Are you managing your store comfortably day to day?
The most important factor to consider when thinking about opening an additional store location is whether you are even capable of taking on the day to day operations of another whole location. If you’re already not doing well managing the location you have, you probably should not take on another one. The last thing you want to do is neglect the business you already have while also failing with another location.
Do you have enough capital to open a new location?
Of course, you need money and resources to continue growing your business and adding locations. When considering whether you already have what you need to grow your business, you should enlist the help of a professional whether it be your accountant or a business banker. You’ll need to consider all the expenses involved with getting another location up and running, as well as the operation. You should also evaluate whether you are able to take on any additional debt or it would be wiser to wait until you can completely fund the opening of an additional location.
Have you already planned for how you will see success at a new location?
Before opening a business or just adding another location, you should have a good plan for how you will continue to increase your revenue. Every business location will come with different challenges and opportunities, it’s important to evaluate them all before you open the doors of your new store. While one strategy for success may have worked at another location, this doesn’t guarantee it will be a win at a new one and you must prepare yourself for adjusting quickly to a new environment and consumers. Because another location also means hiring more staff, you’ll also have to account for the time it takes to find employees and get them trained before the store opens for business.
Have you identified the right location?
Before you can expand your business, you’ll have to choose the ideal new location. You should have specific reasons why you chose your location such as:
Proximity to your ideal consumers
A need for your type of business in the area
Ability to compete with businesses already nearby
Good land development happening in the area
Great property value and/or quality
While it’s most likely impossible to find a store location that has EVERYTHING you are looking for, you should carefully evaluate several potential locations to weigh the pros and cons before deciding. Working with a real estate agent or company could help you narrow down your options and keep your location search to properties that are not only within your ideal price range but have the features you are looking for.
Did you talk to all your vendors about what benefits you could receive with additional locations?
Part of considering the cost to opening an additional business location is having talks with the vendors you are already working with to run your business now. While some vendors can offer reduced pricing for businesses who are looking to expand, there are others that may not. Make sure you understand the cost associated with every aspect of operating a store location including but not limited to:
Even though growing your business is an exciting opportunity, you do not want to rush this endeavor. Many small business owners have previously made the mistake of taking on more than they are able to handle, too quickly. Before you add on to your already busy lifestyle, make sure you consider every obstacle you may face and don’t open your new location doors until you are fully equipped to manage your existing locations with your new one without sacrificing the level of service that today’s consumers demand.