For many entrepreneurs, the primary goal after launching a successful retailer with a solid cash flow is to expand that company to more locations in an effort to reach more customers.
The mistake that many entrepreneurs make, however, is expanding too soon, too fast. The success of a business can be completely destroyed when the decision to go bigger is made prematurely. So, how can a business owner reach more customers in other locations without putting the company at risk?
1. Have Enough Savings
You cannot expand a business without having an adequate financial cushion. You must have a solid foundation before you can even consider the possibility of expanding. Having a cushion means you can eat the cost of your expansion if it does end up failing. It’s a good idea to start saving where you can, and then you can plan to start expanding to other locations. Also, it’s not a good idea to spend all your company’s funds on expansion. If things don’t go well and you end up losing money, you don’t want to put your existing location at stake.
2. Name Recognition
If you’re going to expand to another location, find a place where your company has established some recognition. Talk to your customers and see where they’re from. Maybe a lot of people from a neighboring county have been coming into your shop. Maybe tourists have been coming over from a particular city. If you expand your business to a place that knows you already, you’ll have an easier time expanding your customer base.
An important question to ask yourself is: Does this new location need you?
Are there existing businesses that offer the same or similar products or services as you do? Creating competition with existing companies can result in the plundering of one another’s potential customers, or result in costs being lowered too far so that profits become slimmer. When moving to a new location, it’s best to first ensure that you’ll be a welcome party and that you are providing something the area currently lacks.
No one can be in two places at once. While you’re managing one location, the other ones won’t have the benefit of the business owner’s watchful eye. If the company is family-run, you probably have people you trust enough to maintain your company’s good image even when you’re not around. On the other hand, if you’ve only hired young, inexperienced employees simply to help you run your current location as cashiers or associates, then it’s probably time to hire someone who can be a business partner – or at the very least, someone who is experienced enough to be a trusted store manager. Consider the time, effort, and cost you’ll need to spend doing that.
Getting a business off the ground and running requires blood, sweat, and tears from everyone involved. Keep in mind that opening a new location can feel like starting from the bottom all over again. You have a new customer base to impress, a new location to get accustomed to, new employees to hire, and perhaps even new suppliers to work with. All of this will require not only effort, but a lot of time. If you’ve got your hands full with your current location, it might be best to put off the expansion to a later date. Only embark on this expansion if your company is a well-oiled machine that can maintain itself.
Expanding your business can be a daunting process, but it doesn’t have to be. Know what you’re getting into, be prepared, and you’ll find it to be less stressful than you imagined. For more insight, visit our website at www.biz2credit.com.