Saturday, September 23, 2017

To Grow Or Not To Grow: Is Opening A Second Location The Right Move?


Even if it was never your intention to expand when you first went solo, most small business owners eventually find that their ambitions have changed and that expansion is most definitely something they are now interested in. It is only natural. Of course, wanting to grow and achieving this are two entirely different things. But a great place to start is by opening up shop in a second location. To help you do this, we have pulled together some advice that should guide you in the right direction and open your eyes to any hurdles that stand in your way. Just remember, you go this far, so you can definitely take it the next step. 

Your Business Must Be Able To Run Without You 

The idea of opening up in a second location is not going to be feasible if your business cannot succeed without you. If success relies on your presence, then it is worth working out how you can create an autonomous operation first. If your customers don’t insist on doing business with you directly, though, then expansion should remain on the cards. 

Make Sure Your Success Can Be Replicated

This is going to take some analysis, but you need to understand what variables made your current shop a success and whether this blueprint can be transferred to another location. It could be that you have very specific customers in your current location, or there are shops either side of you that help generate business, or maybe there is a very limited competition where you are now. All of these need to be scrutinised and then compared to your new proposed site. 

Make Sure You Can Afford This No Matter What 

If you are using funds that you have saved to bootleg your operation, then you need to know the risks prior. However, you should never rely on your first location to bankroll your expansion. With that said, any source of funding you are using needs to be prearranged and adequate. If you are using an SBA loan to purchase real estate, then make sure you learn more about this decision first and the risks it entails. If you are using outside investors, then make sure they are good for the money and you have both an attorney and a lawyer overseeing the agreement. 

Consider The Alternatives To A New Location 

The whole point of opening another store is so that you can grow your business, which is why you should consider the other options available to you before committing. It could be that you boost your online operations, knowing that a website is a lot less risky than opening a physical store or office. It could be that you can franchise your current business model and have someone else shoulder the risk in exchange for a percentage of their revenue. Perhaps you could even bring on affiliate sellers. What we are trying to say is, there are other options available, all of which are worth analysing before you commit to a new location.

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