8 Things To Consider Before Opening a New Branch of Your Shop
Whatever your business is selling, 'expansion' can be a scary, but equally exciting, prospect.
Opening a new branch of your shop is a big step forward and a mark of intent for you and your business. Many business owners are happy to stay where they are, but for those with greater aspirations there are even bigger benefits to be had, although not without a few trials on the way of course.
Here we prepare you with a rundown of 8 critical things you need to consider before opening a new branch of your shop.
1. Is your product/service needed in the new area?
This is the first thing you should consider. Is there a market for you outside of your location? Will you have the clientele or is there a competitor already fulfilling your services? While sometimes it can be a case of simply finding the right area to open your new branch, it is vital that you consider whether the market for your service or product is really expandable.
2. Will you still be reaching your target demographic?
You may find that your current area is critical to your service. It might be that you are operating within a student area, or a particular business district. This can have a massive impact on your demographic and potential customers.
Understanding who exactly your customers are is important information that you should gather before diving into any business expansion.
3. Are YOU critical to your operation?
What is it that makes your shop a success? Is it the product or services, or is it what you specifically bring on board? Is there someone else in the business currently who can do what you do, or could someone be employed to do it?
You may have to consider budgeting for training someone to operate one of the locations, but if you are critical to the service yourself, then expansion may be trickier than first thought.
4. Can you transfer your business's key strengths?
Aside from yourself, what are the key strengths of your current operation? Perhaps your location gives you access to particular unique benefits. Is there a particular skill or service which can or can’t be relocated? Do you offer something your competitors don’t?
Making sure that you take the best aspects of your current operation into your new shop is vitally important and will allow you to put your best foot forward.
5. What factors will affect turnover?
Opening a new branch isn’t as simple as creating a carbon copy of your current shop and doubling your return. There are a wide range of factors which will impact costs, turnover, customer numbers and more. You might find that your new location attracts a higher rent, meaning additional overheads. Less local foot traffic may mean additional marketing and advertising costs.
Knowing the factors which will affect your new operation and considering them well in advance will give you a far clearer idea of your new shop's potential for success.
6. How will you manage payments and finances?
Will a second operation impact your payment processing and management of your finances? While turnover, net profits, etc. can be run through the same business accounts, you will still have to start calculating the performance of two operations instead of one.
How will your payment processing system operate? Do you currently have a point of sale system that can operate across multiple venues? This may be something that you will want to invest in to ensure smooth tracking of sales and financial performance.
7. Are there alternative avenues for growth?
Does your shop currently have a website and would this be a valuable addition? Some shops will find less use for a website, but for others it can prove extremely useful. A website can enable you to reach customers through an entirely new medium with vastly lower overheads than a 'bricks and mortar' operation.
Is expansion of your current location a viable alternative? This could allow you to boost revenue with less of the complexities of developing a completely new location. However, planning permissions and availability can limit your ability to go down this avenue.
8. Are you ready?
While there are a lot of steps to be taken, as a business owner you’ll already be well aware of many of them from the first time around. While expansion can seem intimidating, those with the foresight to plan ahead and the confidence to follow through will find themselves in an enviable position as their business goes from strength to strength.