Is your business is booming? While it seems logical to open a second location it’s important to ask yourself some important questions before you take the plunge and open a new location.
Have you done the market research?
Be objective when it comes to researching the market, and avoid relying on a ‘hunch’ or what you might think you know. Conducting a market analysis will help you to identify your new target market and assess demand and anticipated future competition. Look at both quantitative and qualitative information like:
- Customer demographics
- Competitors in the area
- The strength of your current industry—is the demand for your product or service growing?
- If possible, do a test run of your product or service—like a market stall or handing out free samples. This will provide valuable insight into how it is received and potential demand.
Do you have the cash flow and capital?
You’ll need enough capital to open the new location, so make sure you have the funds to cover things like rent, inventory, new recruits, marketing your second location etc.
Starting up in a new location can also mean taking a hit to your finances, so it’s also worth looking at your current cash flow. It’s worth speaking with your accountant, financial advisor or bank manager for their insights into your current financial health too.
If you think you might need a loan to open up the second location make sure you have a business plan. There are plenty of business plan templates around to help you put one together, and remember most lenders will want to see a detailed plan for the new location.
How is your current business performing?
Are you running out of inventory too quickly, or turning customers away because you’re too busy? These are both signs of a business that is growing and should be taken into consideration when assessing the health of your current business before expanding into a second location. Look at your sales history and projected cash flow to help you assess the health of your business, or you may even want to get an objective assessment from a financial professional.
Do you have the right systems in place? (And are they exportable?)
Running multiple locations doesn’t mean having multiple communication processes in place, rather you need to ensure you have one, robust system that is exportable across locations. A system like Deputy offers communication and rostering support that can be applied across multiple locations. This will ensure your business can be consistent, efficient and staff find it easy to maintain the same level of customer service across operations.
How will the new location be managed?
There’s only one of you, and there’s only so many hours in the day. Ensuring you have the right training and management succession processes in place are vital to successfully opening a second location. Rather than splitting your time between both locations, think about a system that can support managerial task delegation. With Deputy, you can delegate tasks and communicate vital pieces of information, even when you’re offsite. This can help your business run seamlessly, while also giving you more freedom and allowing your business to operate efficiently without you
Are you looking to expand your business operations in 2018? Find out how Deputy can make your life easier so you can get you back to loving your business again. Get in touch with our friendly team today on 1300 DEPUTY.