Every small business should want to grow because a stagnant business is unattractive to employees and customers. Stagnation does not lead to progress or long term success. As American author John Maxwell stated, “Growth equals change. If you want to get better, you have to keep changing and improving. That means stepping out into new areas” Among the 33.2 million small businesses in the United States, some will choose the growth path of opening a second business location. However, it is important to know that growth must be approached wisely and strategically.
Ways to Grow a Business
There are many ways for businesses to grow to advance their enterprise and increase revenues. They include improving current products or services and creating new ones, increasing share of wallet with current customers, improving processes to increase productivity and reduce costs, offering products or services through new business distribution channels, expanding its markets by selling into untapped customer bases, implementing more competitive pricing, employing more effective marketing strategies, and expanding into new geography, including opening a second business location.
7 Signs You Should Open a Second Business Location
Consider these signs that you should open a second business location:
- You have more business at your current location than you can handle comfortably. That may mean that you are regularly turning away customers because the location is too busy, or because it doesn’t have enough space for the necessary inventory.
- You have loyal, skilled, and reliable employees that have strongly signaled that they want more hours and more opportunities to grow.
- You have determined that you have a loyal local customer base and are also drawing customers from outside your immediate area, creating a natural opportunity to expand.
- You have identified a new area that would increase your overall brand strength and improve market penetration.
- You understand your competition and see some gaps that you can fill by expanding into a new location.
- You have refined your business processes so that they can be easily replicated in a second business location.
- Your financial and accounting advisor has helped you understand that the financial health of your business allows you to expand and makes expansion advisable.
Steps to Open a Second Business Location
Ask yourself some critical questions before proceeding. What are the risks of opening a second business location? Will you need to change your business’s legal structure? Will a second business location cannibalize sales from the first location? Do you have sufficient management personnel to staff the new location? Will some current employees be willing to work from a second location?
Follow these steps to open a second business location. First, carefully define your business objectives for expansion. Second, document your business processes to create an effective roadmap for the new location. Third, create a cash flow forecast that will guide your financial actions. Fourth, craft a strong management team that will deliver results in the new location.
Seek Professional Accounting Assistance
Contact Orcutt & Company, based in Milford, OH. We deliver comprehensive financial management for small business owners & individuals, providing strategic solutions that best address client needs and aspirations. Our comprehensive accounting services keep you organized and give you the data you need to make prudent business decisions including bookkeeping, payroll, and tax.
