Expanding a successful business in Florida typically requires careful planning. Those who rush into expansion might end up damaging not just their company’s reputation but its long-term solvency as well. A period of significant growth is actually one of the most dangerous times for an organization, and companies may find themselves floundering and failing if executives or owners approach expansion in the wrong ways.
Particularly when a business offers retail sales or services to the community, growth might involve opening another location. The three planning tips below can help control the risk involved in establishing a new location as part of a business expansion effort.
Balancing cost with local demand
The more demand there is for a business’s goods or services near a specific location, the more likely that location is to be a profitable one. However, commercial properties typically have prices that reflect the opportunities in a community. Areas with more foot traffic and lower crime rates tend to have much higher costs per square foot of commercial space when compared with less desirable neighborhoods. Ensuring that the projected sales more than balance out the operational costs will be in a key consideration.
Guaranteeing appropriate staffing
The farther away a new location is from an existing one, the better the chances that the company can tap into a completely new market and expand its overall operations. If a new location is a significant distance from existing facilities, particularly if it is in another city or state, it may be quite difficult to arrange for the right Staffing support when the company initially opens. Existing workers may not agree to transfer to another location, particularly if their support is only necessary train new workers. Ensuring that there is the right talent nearby can be as important as evaluating the costs for a physical location in an area.
Reviewing local competition
A small or closely-held company will typically have an owner who is intimately familiar with the local competition. They may know every business in the same industry, which makes competing with those businesses a straightforward process. It can be much more difficult to evaluate competitors in a community where the owner of a business does not have existing ties. They may overlook key competitors who dominate the market through word of mouth rather than online presence or marketing. They may also not understand the culture of the local community, which can make it difficult for them to appeal to consumers and the way that they do in their current market.
Generally, it is necessary to keep growth slow and steady to manage costs to the best of an organization’s ability. Ideally, a new location won’t need to turn a profit to cover its operating costs for the first few months of its existence, if not longer. Addressing the unique challenges inherent in opening a new business location before committing a company to expansion can take some of the risk out of operational growth.