Things To Know When Expanding To A Second Location


As a business grows, it naturally requires more room to function. More storage space or extra office space are always welcomed additions to a thriving company. But expanding your business doesn’t have to mean staying in the same place.

You can choose to relocate your business to a larger office space. Or, you can choose to expand it to a second location. Since both of those are relatively complicated endeavors, we will use this article to focus on expanding to a second location.

What To Do Before Expanding To A Second Location?

Things to know when expanding to a second location

As with most business decisions, the preparation behind it is just as necessary as adequate implementation.

So, to help you prepare for the process of expanding your business to a second location, we are going to elaborate on essential aspects to keep in mind.

1# Make sure that expansion is the right choice

Not every growing business is suitable for expanding to a different location. Companies based heavily in the local area will usually not benefit much from expanding to a new location. Instead, they would likely benefit more from staying in the area and finding a different way to grow.

Moving to a new location often entails extra marketing efforts and fighting the local competition. And just because you’ve managed to develop in your current area doesn’t mean that the next one will be as friendly.

2# Finding the right neighborhood

The crux of the issue is whether you’ve found the right area to expand your business. If you determine that the new neighborhood has booming marketing that can benefit your company, you should consider expanding. This, unfortunately, is easier said than done.

You need to have a deep understanding of why your business performs as well as it does. And you need to know how to evaluate the local market and see its pros and cons.

You also need to see how tough the local competition is and whether you are fighting above your weight when it comes to marketing. If you feel that the neighborhood in question is suitable for your expansion, you should consider it. Otherwise, consider expanding in your current area or finding a new way to invest.

3# Risks vs. Benefits

While on the subject of investment, it is essential to understand that expanding your business to a second area is an investment. And, as such, it has its risks as well as its benefits. As a business manager, you need to carefully consider the benefits and see whether they outweigh the risks.

First, you need to understand how much it will cost to set up your business in a new area. Second, you need to consider the initial investment of running your business. This includes marketing, staff, and various other expenses. Once you do so, you need to outline clear parameters on whether or not your second business place is lucrative.

This means evaluating the local market and determining the revenue required to make your business profitable. We would advise you strongly to consult with a more seasoned professional and see their evaluation of the local market. If you do determine that the benefits outweigh the risk, then proceed with the expansion. Otherwise, try to find a different investment.

4# After Expanding

So, let’s now assume that you’ve done your homework and decided that expanding to a new location is the right business move. What now? Well, you’ll need to take a couple of steps to ensure that your new business location develops properly.

5# Set up a team

Whether or not your new business location will be successful depends on the people who run it. Sure, you may have a great product, quality service, or even a unique brand identity.

But, the main factor that will determine the success of your business is the people that help your run it. And since you cannot oversee both of your locations simultaneously, you need to have faith in the people you hire.

Here, it is paramount to understand that you need to start the selection process first and move your business second. By the time your business is up and running your team should already be familiar with each other and understand what your business is about. Use the weeks before opening to train new staff members and introduce the more experienced members to the new area.

6# Tackling Marketing

The second important aspect is marketing. Namely, just because you have good brand recognition with your current business doesn’t mean it will be sufficient in the new area.

You will likely have to tackle local SEO and specific promotional campaigns to get your business off the ground. The sooner you start tackling your marketing, the better the odds that your new location will see decent traffic.

Final Thoughts

The most challenging part of expanding to a second location will be to ensure that both sites function properly. Previously, you could rely on your leadership skills alone to provide top quality and efficient performance.

But, since you cannot make a clone to run your new location for you, you will have to drift away from micro-management and the hands-on approach. If you want to run an expanded business, it is vital to understand your limitations and focus your attention. Your job will revolve around making big decisions and ensuring that your managers do their jobs.

This requires a good understanding of your business, as well as a fair bit of experience. So, as a parting piece of advice, we suggest that you continue researching what it actually means to run a single business in different locations. The more you can learn from other people’s experiences, the better.

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Author Bio: Josh Thompson works as a business consultant and a marketing manager. Most of his work is focused on business expansion and business relocation, where he works closely with companies like Zippy Shell DMV.