Having a successful small business is an amazing accomplishment. For some people, the desire is to have multiple locations. This is a decision that must be carefully considered because of the responsibilities and changes that come with this type of small business expansion.
While considerations might be different because of business-related factors like the industry and the economy, the following things are some that might prove to be crucial during the evaluation process.
Financial readiness
The financial health of the first location can impact whether opening a second location is viable or not. The second location may not be able to sustain itself financially for months, so the first will likely have to support it. During this time, you have to think about the time, attention and resources that it will take to keep the second location afloat. It’s easy to underestimate how much the second location will need in the early days, so business owners should err on the side of caution with this aspect.
Market research
Success in the first location doesn’t mean that the second will be as successful. Conducting thorough market research can help the small business owner to determine if this is viable. Some factors that must be analyzed include competition, consumer demand and demographics. Finding a suitable location takes just as much work because the current brand image must be maintained.
The legal aspects of opening a second location must also be considered. This can include factors like getting contracts set up for the new location because the ones for the primary location may not cover the new one. Working with someone familiar with these matters is crucial.