If business is booming at your flagship location or you’ve been eyeing a retail space that your sign would look great on, you might be considering opening a second branch of your business.
For a healthy and profitable company, opening a second location can offer business owners the opportunity to solidify their market presence, expand their customer base, and increase their overall revenue. However, leaping too soon can be part of the recipe for financial disaster.
Before committing to taking on the responsibility of a new site, you’ll want to ensure that your move won’t lead to double trouble. If you’re wondering if two is better than one, check out these eight signs that your small business is ready for a second location.
You have the necessary revenue
First and foremost, you’ll need to ensure that you have the necessary revenue to open a second location. While you don’t need access to the entire payment amount up-front, you will need to secure enough income to consistently and promptly pay the mortgage on your new place of business.
If you want to fast-track your expansion, you can look into applying for an instant small business loan from a reputable marketplace. An instant small business loan will accelerate the loan process and help you break ground on your new location more quickly.
You’re doing good business
If expansion has been on your mind, take stock of your current location’s performance. Is it running smoothly? When your first location is organized, profitable, and well-managed, a second location is more likely to flourish.
While you won’t need a line of customers that floods out the door before you open up your second shop, you ought to ensure that the thriving customer base you have now will make the cost of a second location worthwhile.
You’ve noticed market trends
To keep your company fresh and enticing to customers, you’ll have to keep your finger on the pulse of constantly changing market trends. For example, you may notice that stores in your industry are thriving in a particular part of town or that commercial real estate is booming in the next city over. Once you’ve examined market trends closely and determined that a second location could benefit because of them, it may be time to work on the expansion.
You have reliable staff
A business is nothing without its employees, but it is no easy task to fill any company with a stellar staff. Be sure to consider that staffing your new store with a brand new team will be time-consuming and expensive. Suppose you’ve staffed your business with employees who created a positive and successful work environment. In that case, you may be able to utilize their help when staffing and training employees at your new venture.
While hiring new employees will be inevitable as your business flourishes, being well-equipped with a trusty foundation of existing staff is a tell-tale sign that your growth will be successful.
You’ll fill a niche
If you’re considering doubling down, be sure to note whether or not your business will fill a niche. For example, if you run a coffee shop and the only coffee shop in the next town has recently shut down, you could consider replacing it.
Before jumping in, examine why other businesses couldn’t satisfy the market’s needs. Ensure that you understand what went wrong and how you can do better.
You can easily replicate your operational plan
If you have a business plan designed for your original location, examine it to see if you think you can replicate it at a second location. If the program is easily replicable, the next space will likely thrive.
You have customers coming from far away
If your customers make a commute to access what you’re selling, you might have your hands on a substantially valuable and desirable product. Having customers from nearby cities should reassure small business owners that duplicating their shops is wise. Those who are traveling to reach your original space will be thrilled to know that you’ve opened a second location, and you’ll already have a headstart on the local competition.
Your current location has too much business
Managing a bustling business bursting at the seams can do you more harm than good. After all, too much business in too little space can hurt your business’s bank account if you’re short-staffed, have long wait times, or can’t produce products quickly enough to keep up with demand.
If you have the startup capital, you could ease the burden on your flagship location by opening a second one.
Parting words
While starting your own small business is exciting, seeing the company grow into a pair is uniquely rewarding. If you notice that your location shows the signs mentioned above, it’s time to look into up-leveling your company and prove that two is better than one.