Should You Open a Second Business Location?

by | Jun 6, 2022 | Small Business | 0 comments

Questioning whether or not to open a second business location is undoubtedly one you should not take lightly. If you don’t take the time to consider all of the risks involved, you could be heading for a disaster. On the other hand, if you carefully weigh the options, examine all details, and plan for any contingencies, you could have a huge success.

So how do you go about preparing to open a second business location? What are those critical details and items that you need to consider? And how do you maximize your expansion efforts to put your company on a trajectory for real growth?

Figure out what made you successful in the first place

If you are at a point where you can consider opening a second business location, you’ve done something right up to this point. What made your current endeavor successful? Figure out how you got to where you are and replicate some of the steps and processes that got you there.

Have an established plan in place

The fact of expansion itself is among your primary goals in opening a second business location. But it would help if you also dug deeper. Why are you expanding? Is customer demand exceeding what your current location alone can fulfill? Are you trying to get into a new market? Another reason you may be looking into expansion is to access new talent. Or perhaps it’s part of an overall branding campaign. Whatever the reason for opening a new location, put your objectives down on paper. And establish both a short-term and a long-term plan for this new location.

Figure out how to safeguard your company culture

Your culture is at the heart of who you are as a business and a brand. When you open multiple locations, you stand the risk of diluting this brand. And by association, you stand the chance of undermining your company culture. Entrepreneurs who open numerous areas have a solid mission and vision that extends to every facet of the business. Make sure that your staff engages with this mission. Holding regular meetings and check-ins will help keep that culture in place.

Ensure that you have the cash flow

Your current business endeavor may be quite profitable, but does this mean you’re ready to take that next step and open a new location? Take a deep dive into your books to determine if the profits are, in fact, enough to warrant this type of growth and if the cash flow is going to be enough to help sustain any expansion.

Research your new market

One of the biggest pitfalls of opening a second business location is not understanding the new market well enough. This is where thorough and diligent research comes into play. When you open a new place, it will be pretty costly. You don’t want just to be throwing money away because you failed to understand how this new market will receive your service or product. Is the demand there for what you sell? And how much do you have to tweak your approach to accommodate this new market?

Make sure your team is ready!

Indeed, the demand for your product may be there and might thus warrant a new location; however, you also have to have the team in place to pull it off. Having a solid team means having reliable employees, passionate employees, and employees who understand the nuts and bolts of your business. You cannot open a second location alone. You need to be able to rely on your people. You will likely have to put some of these people in leadership roles in this new location. So ask yourself, is your team ready?

First Union Lending is Here for You

If you consider opening a second business location, we would love to help. We offer a variety of fast and flexible business loans geared toward smaller companies. With short-term loans, SBA loans, and merchant cash advances, among other financing types, we have the resources on hand now to help you. Even if your credit score is less than ideal, we might still have a financing solution that could work. Call today, and let’s get started.

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Only U.S.-Based Businesses are Eligible