When does it make sense to open a second location for your business?
When does it make sense to open a second location for your business? What business metrics should you achieve? My business has been picking up, but I don't want to pull the trigger too early!
Opening a second location would involve additional capital. Check out that if the second location fails to deliver, your business will not be crippled.
A second location however is a great idea when business is on a roll, as long as it gives access to a whole new market for selling to, or sourcing from, preferably both. Then it makes great sense to move on. The expected results should be of a quantum magnitude and not just incremental.
Do some research for areas where your competitors are not so strong and the demand for your products is good. When sales growth in your original area begin saturating and/or distribution becomes too diversified, pool the trigger.
Carrie, congratulations on what you have achieved already. Some great answers here already. I am only going to recommend you read the " E-Myth " by Michael Gerber. Combined with the great answers you have already recieved, this should assist you to see the way forward for you and your business.
Carrie the very short answer is this: once you have the first location nailed and it is able to operate without your full attention. In my experience many folks have failed because they are opening the second shop before the first one is working. I'd be happy to chat off-line if you like. This is a topic that deserves very careful consideration.
Most people will say I'm crazy, but here goes . . .
Second location depends on your business of course. But the typical business owner is already overstretched with only one location. Believe it or not you would probably be better off straight from 1 location to 4 locations. If your cash and business moxy does not allow you to think at a level of 4 locations, don't even go to a second location.
In my 30 years of experience I have seen a curious model play itself out: You go from 1 to 4, then 4 to 10, then 10 to 40. Each time you will have to reinvent how you manage. If you don't learn to reinvent how you manage, even location #2 could kill the business and put you in the hospital.
After 40 locations, sell out or franchise it.
Great question. I suggest that you read the book, "No Man's Land" by Doug Tatum. He does an excellent job answering this question. Good read and definitely want this in your library.
when you got three achievements
1-above than break-even according to capital.
2-main core of team will be completed and smoothly run the business.
3-business plan has an opportunity or a space for second place.
Only if there is a real advantage to physical connection and human interaction or distribution of goods.