If your brick-and-mortar business is successful, you might consider expanding to a second location. Opening a new store may be fun, but it also comes with big risks. Another outpost has an additional cost, but there is no guarantee that the new base will be as successful as the first. However, if you go about it the right way, expanding your business can help you find new customers and achieve more profitable growth.
Tips for opening another business location
Opening and running a second location requires just as much effort and consideration as the first location. The following tips will put you on the fast track to success.
1. Create a business plan.
Starting and expanding a business should always include detailed planning. Business plans can come in two forms: lean startup plans and traditional plans. Both outline goals and objectives as a way to attract investors' attention.
Some people believe that it's fashionable these days to skip writing a business plan, but that may be foolhardy.
2. Consider online alternatives.
Creating an online store is cheaper than opening a new brick-and-mortar store. With an e-commerce store, you don't have to pay rent or utilities, but you can reach a new market of customers. Also, unlike a physical location, an e-commerce site can remain accessible 24/7.
3. Evaluate the market.
Even if you have a gut feeling about opening a store, keep doing your research. Are there any competitors in the space you are targeting? How are they doing? Is there room for your business? Or should you choose another location? Does your site attract your target customers? Only open a second store in a market where you are confident your business will be successful. please. Anything less than this could result in more expenses than profits.
>>Read next: Pursuit of profit: Application and utilization of break-even point analysis
4. Find a new location.
Finding the perfect location within your ideal market is just as important for your new location as it was for your original business. While the rental or purchase price of a property is an important consideration, you should also consider safety, local regulations, average foot or car traffic, accessibility, and demographics. Make sure you are located in an area where there is sufficient demand for your product or service and where competition from similar businesses is modest at best.
And it's not just what's outside the second location that matters. The building itself is equally important. Can you reasonably fit your operations there? Can you modify the space to resemble the first location and develop a unified brand? The landlord will seem trustworthy and responsive? ? Be sure to answer these questions before you commit to your second property.
5. Estimate your inventory needs.
Every location requires its own inventory, so your inventory needs will change as you expand. If a customer visits a new site and you run out of a particular product, you typically can't get the product quickly enough to serve that customer. Use current analysis to predict inventory requirements at new locations. Consider your current and future supply chain and warehousing needs along with your inventory. [Read related article: How to Cash In on Your Excess Inventory]
6. Secure cash flow.
If you're opening a second business location, it's best to have the funds in hand before you begin the expansion process. If you don't have enough cash flow, you can look for angel investors, Small Business Administration (SBA) loans, or peer funding. Make sure you can financially handle the worst-case scenario, such as being stuck for several months while your new location gets established.
7. Assess the competition.
Competition is important, and opening a second store may introduce competitors that aren't in your first store. Find out what other companies are currently doing in your new field to determine which companies might be your competitors. From there, he can analyze the successes and setbacks of the companies and determine what different challenges these companies present in his second location in keeping the business competitive.
8. Record the process.
The second location should work the same as the first location. Therefore, we will create an educational manual on everything from how to use the POS (POS) system to customer follow-up. Have someone else review these to make sure they're easy to understand even if you don't have someone nearby to explain it to you. [See which high-quality POS systems we recommend.]
9. Find great staff.
Staffing this new location requires hiring trusted employees and leaders who are passionate about the company's mission and the way it does business. If you're opening in an unfamiliar area, finding locals who know the locals well can give you an advantage when building connections and adapting to the local culture. Start this networking process by contacting local business associations and attending some events.
10. Establish a training program.
New employees may require more training than employees at your first location. This is mainly because they are not always on hand to find and fix problems. You should also have evaluation criteria in place so that you can spot problems before they occur. Schedule regular check-ins with the location manager to evaluate employee performance.
11. Prepare your marketing campaign.
Just like when you opened your first business, your second location requires pre-opening promotions and a memorable grand opening event. You should then plan a year of consistent promotion to firmly establish your second location. One of the unique benefits of opening a second store is that your first store may have customers who may be willing to help spread the word, and they may live near your new store. You may also be able to promote your company to other businesses in the new market.
12. Open it the right way.
While grand openings are an important part of marketing your new store, you can also introduce your new spot with a soft opening. This small start means an incomplete opening, making it ideal for opening a second business location. From there, you can gradually move resources and employees from one location to another. Additionally, a soft opening is ideal for commissioning a full operation, as you may notice gaps that need to be filled.
13. Alert local media.
Even if your company offers a very specific product or service, there's no harm in reaching out to local journalists. Local journalists can help spread the word about your business to a specific or general audience. Some local writers may report on new businesses by focusing on the company and founder's story, so don't be afraid to bring some personality and background to your pitch. Be sure to avoid PR mistakes that can ruin your business.
14. Commit to yourself.
You probably know from your experience opening your first location that starting a company requires spending most of your time on the process. The second location is no different. Please leave some time in your schedule to accommodate any needs that may arise. The second boot can be quick, so be prepared.
Success in the first location does not guarantee success in the second location. Different demographics in each market can make a big difference. However, with careful research and planning to ensure your business has the funding, procedures, and staff to carry out its mission, you can increase your chances of success in your new region and beyond. It will increase.
Opening new stores can be a way to get customers to spend more cash.