As a small enterprise proprietor, future development plans and small enterprise enlargement dwell rent-free in your thoughts. It’s comprehensible—particularly once you’re seeing the success your present enterprise is experiencing. 

And if you happen to’re like 64% of US small enterprise house owners, you anticipate to extend your income in 2023. However have you ever given a lot thought to how you’ll enhance your income? It may be time to contemplate increasing your small enterprise to a second location, relying on your online business mannequin. 

Increasing your small enterprise isn’t a choice to make flippantly. We’ve pulled collectively every thing it’s good to know earlier than you decide to opening a second, third, or extra areas on your small enterprise.

On this put up, we’ll cowl:

• How one can know once you’re able to broaden
• The professionals and cons of opening a second enterprise location
• How market analysis performs a task in increasing your online business
• What instruments are going make your enlargement profitable

Let’s dive in.

How have you learnt in case your small enterprise is able to broaden to new areas?

Opening a second (or extra) location and increasing your small enterprise is a vital determination for each enterprise proprietor. Certain, eager to broaden your online business is a given for most individuals, however discovering the suitable time is important. 

Opening too quickly places you vulnerable to overextending your self and your online business. However ready too lengthy can imply you lose the thrill and momentum you’ve labored so onerous to construct. 

So, how have you learnt if you happen to’re able to open a brand new location? Check out your present enterprise and ask your self these questions:

• Do you’ve got extra enterprise than you possibly can deal with at your present location?
• Is your bodily location too small for the shopper base you’ve constructed?
• Do you’ve got the programs to recreate your online business in a brand new location?
• Do you constantly have excessive wait instances, lengthy reservation lists, or line-ups?
• Do you’ve got a steady monetary basis to assist market enlargement?

When you answered a convincing “positively” to most of those questions, it may be time to begin planning easy methods to broaden your online business to new areas.

Some great benefits of small enterprise enlargement to new areas

It’s pure for entrepreneurs and enterprise house owners to wish to see the companies they’ve labored so onerous for develop. And once you’ve been profitable—particularly early on—it could actually plant the concept of enlargement in your thoughts. Whereas it’s pure to have some hesitation round increasing, there’s little doubt that there are clear benefits to increasing your small enterprise.  

Welcome a brand new buyer base

While you ask enterprise house owners why they wish to broaden their enterprise, you’ll usually hear about reaching new prospects. And that’s for purpose—whereas repeat prospects are extraordinarily precious, new prospects are the gas that take companies to new heights. 

While you broaden into a brand new geographical space, you’re coming into a brand new market with a brand new pool of consumers. You’ll be able to attain individuals who could not have been in a position to journey to your unique location, faucet into those that dwell regionally, and suit your goal market.

A big, numerous buyer case is a good way to future-proof your online business from being overly reliant on a single consumer sort. 

Improve your gross sales quantity and income

When you’ve got a bodily retailer, you’re constrained by the obtainable house in that house. In spite of everything, you possibly can solely inventory and promote a certain quantity of merchandise. However once you broaden to a brand new location, you’re additionally increasing your house. You’ll be able to carry extra merchandise, new product strains, and even new classes of merchandise. This offers you the possibility to extend your gross sales quantity.

It additionally is sensible that your income will enhance. For instance, if you happen to at present have a ten% gross revenue margin in Retailer #1 and replicate that success in Retailer #2, your GPM stays 10%, however you’re doubling the cash from that share.

Merely put, it’s a no brainer: you possibly can anticipate extra income if you happen to’re making extra gross sales.

Broaden your model 

Model recognition is a big issue for customers relating to how and the place they spend their cash—being constant along with your branding can enhance your income by 20%. 

From social media to your in-store expertise, you’ve spent years honing your model id, ensuring it comes by way of in every thing you do. And with the chance to open a second location, you even have the chance to broaden your model and develop your model recognition.

Broaden your model 

Model recognition is a big issue for customers relating to how and the place they spend their cash—being constant along with your branding can enhance your income by 20%. 

From social media to your in-store expertise, you’ve spent years honing your model id, ensuring it comes by way of in every thing you do. And with the chance to open a second location, you even have the chance to broaden your model and develop your model recognition.

While you open a second location, abruptly your model will pop up in entrance of potential prospects in multiple place. You’ll begin to stand out from rivals as you positively affect folks’s shopping for choices. 

You’ll even have the chance so as to add layers to your model that enchantment to completely different goal markets relying on your online business plans and geographical variety.

Create an economic system of scale

Increasing to a second location has the good thing about spreading out the chance of doing enterprise. It could possibly cut back the potential destructive affect of 1 poor determination or unsuccessful product on your online business.

It’s also possible to unfold the enterprise prices throughout extra markets, creating an economic system of scale. Economies of scale are the monetary advantages {that a} enterprise will get due to its dimension. While you unfold your online business prices over bigger scales, you successfully decrease the price of doing enterprise per buyer.

The disadvantages of small enterprise enlargement

Whereas there are clear benefits to increasing your online business, there are additionally disadvantages that it is best to think about. These disadvantages shouldn’t be seen as a purpose to not develop. As an alternative, they’re issues to keep watch over as you broaden so your second location will be as profitable as your first.

Lack of management

As your online business grows, you’ll inevitably want to contemplate delegating administration tasks and relinquishing some management. You’ll be able to’t be in every single place directly, so that you want to have the ability to step again and belief your staff to successfully handle whilst you’re away. 

Earlier than you broaden, get comfy with the concept you want to have the ability to lose a little bit of management. Work to construct a staff that you’ve got confidence in—it will assist relieve a number of the stress of opening a brand new location.

Money constraints

Enlargement requires a big monetary funding to achieve success. You’ll want a brand new property, tools, stock, workers, and extra to open the doorways to your new location. Evaluating your monetary scenario earlier than leaping headfirst into enlargement plans is vital.

You could must borrow cash to make your enlargement goals a actuality. Take a transparent have a look at your funds and the obligations of taking up debt beforehand.

Elevated overhead prices

Past the preliminary start-up prices of opening a second location, you’ll even be confronted with a rise in your ongoing overhead prices. With extra workers, extra stock, and extra every thing, it’s vital to make sure you’ve bought the wanted capital to cowl your working prices.

Ensure you’ve crunched the numbers earlier than signing the lease on a brand new location!

Greater worker turnover

When companies broaden too shortly, they usually rent shortly as effectively. This will result in poor hiring and onboarding practices. Plus, when small companies broaden, workers are sometimes given further work, which might result in overworked workers. 

These components result in increased worker turnover and with the US turnover charge sitting at 47.2% in 202, you have to be working onerous to decrease your turnover charge. Plus, changing an worker prices as much as two instances their annual wage. So it is sensible that it is best to do every thing potential to create constructive work environments and keep glorious hiring and onboarding practices.

The significance of market analysis earlier than increasing your small enterprise

Earlier than you dive into increasing your online business, it’s very important to do a little analysis—particularly, market analysis. 

Market analysis is gathering and analyzing information about your industry-specific market to raised perceive every thing out of your rivals to prospects to geographic areas. You should utilize all this information that can assist you make choices about your enlargement plan.

It’s crucial to conduct market analysis earlier than increasing your online business. The data you get out of your market analysis will assist cut back the dangers related to enlargement. For instance, suppose you had been seeking to open a brand new location in a suburb however discover that 95% of your present buyer base identifies as city dwellers. In that case, it’s possible you’ll rethink the place to open your second location.

While you undertake market analysis earlier than increasing to a brand new location, you’re extra prone to:

• Discover the suitable geographical location for your online business to broaden into.
• Perceive the needs and desires of your goal market. This will translate into improved buyer satisfaction and elevated gross sales—when you understand what your prospects need and want, you possibly can serve them higher.
• See higher outcomes out of your advertising efforts.
• Enhance your general model consciousness.

When you’re questioning the place to begin concerning market analysis, there are two key analysis areas to discover earlier than you decide to an enlargement plan.

1. Buyer analysis

Buyer analysis is a very powerful type of market analysis you are able to do. Finally, it helps you perceive extra about your present and potential prospects. This analysis has the ability to tell each determination you make about your second location—from what merchandise to inventory to the place your bodily location ought to be. 

If you’d like a easy approach to conduct buyer analysis, think about contacting your prospects to finish a survey or ballot. You’ll be able to e mail your buyer record and even allow them to learn about your survey throughout their checkout course of. Supply a reduction code to incentivize folks to finish your survey. 

It’s also possible to go one step additional and conduct focus teams or one-on-one interviews. It is a nice approach to go in-depth along with your prospects and spend time studying about who they’re. You must also supply an incentive to take part, particularly since a spotlight group or interview takes longer than a web based survey.

Each strategies will enable you to be taught why they love your online business, what they’d change, and a few key demographic details about who they’re as customers. 

2. Aggressive analysis

The following sort of market analysis it’s good to think about earlier than increasing is aggressive or competitor analysis. Understanding what your rivals are doing is important to know how one can stand out in your {industry}. It could possibly additionally enable you to pinpoint a bodily location that will want your companies because of the lack of rivals within the space.

Evaluation your rivals’ advertising methods, areas, product choices, and pricing. With this info, you may make knowledgeable choices about increasing your online business to a second location.

Precious small enterprise enlargement instruments that can assist you handle a number of areas

Now that you simply’ve completed your market analysis and weighed the professionals and cons of opening a second location, it’s time to search out the suitable instruments to make this transition simpler. 

Whereas a few of these instruments could also be acquainted to you, making certain the choice you’re at present utilizing can handle and combine with a second location is important. As a result of having to handle two separate programs appears like a headache you don’t want!

With these 5 instruments, you’ll be effectively in your approach to streamlining the operations of your latest location.

1. Discover an built-in POS and stock administration system

There’s one thing to be stated for instruments that may handle multiple factor concurrently. And a point-of-sale (POS) system that integrates along with your stock administration is a kind of issues that may prevent time, cash, and sanity.

Take it one step additional with a POS system that may combine along with your ecommerce retailer, when you have one. When in search of a POS system, hold your eyes out for an “omnichannel platform.” It is a system that helps the sale of your product wherever you discover your purchasers—assume shops, pop-up retailers, native markets, desktop computer systems, cell units, and even social media.

Listed below are 5 must-haves (and two nice-to-haves) to contemplate when choosing a POS system that can assist you handle new areas:

Should-haves

• A wide array of cost choices. You wish to receives a commission, so to try this as usually as potential, give your prospects as many cost selections as potential. Keep in mind, the extra flexibility, the higher!
• Constructed-in stock administration capabilities. Replace and observe your stock throughout a number of areas so that you by no means order an excessive amount of or too little product.
• Bank card processing. It ought to go with out saying, however it’s important that your POS can course of bank cards and is appropriate with a number of bank card processors. That means you possibly can settle for as many various bank cards as potential.
• Bulk product importing. Including your product info into your POS system is a gradual course of; when you have tons of of merchandise, it might take days to enter all that info precisely. Some POS programs have a bulk-product import operate that allows you to import all of your product info directly. 
• Add in promotions and reductions. A POS system that may simply settle for reductions offers you the flexibleness to mark down your merchandise and supply particular promotions. 

Good-to-haves

• A cell POS system. Taking your POS system on the go is nice for sure companies. When you take part in loads of native markets or occasions, bringing your POS with you rather than relying solely on money is good.
• Third-party compatibility could also be essential sooner or later. A POS system that may combine with third-party programs opens up a world of prospects. Adopting a POS with this functionality helps you to add new performance as wanted.

2. Use a messaging system to arrange your staff

Distance may make the center develop fonder, however it may be onerous on a small enterprise. As an proprietor, splitting your time between two or extra areas will be tough for you and your workers. 

Discovering methods to speak along with your workers is important even when you possibly can’t be in the identical place. Why is communication so integral to operating a profitable small enterprise?

Reap the benefits of all these improbable advantages and make the transition to a second location smoother through the use of a messaging app that makes it simple for you and your staff to speak with one another. 

An instantaneous messaging app that allows you to immediately message staff members as people or as teams is a good way to simplify day-to-day communication. With a staff communication app, you’ll be capable of hold everybody on the identical web page, even when they aren’t in the identical location.

Ship a fast message to alert workers of an incoming supply, relay details about an upcoming sale or promotion, or discover a staff member to fill a shift. With a messaging app, you possibly can attain all of your staff members directly. 

For a messaging app to be really efficient, it’s good to put it within the arms of your workers. What higher means to try this than utilizing a system that works on their cell units? Essentially the most environment friendly messaging system is a messaging app that may be put in on iOS and Android.

3. Make scheduling throughout areas simple with a contemporary scheduling device

Including in a second location doubles your admin workload. Making a schedule on your workers is without doubt one of the time-consuming duties that completely will double up once you broaden. A second location may complicate scheduling when you’ve got workers working at each areas—it’s good to be sure you aren’t double-booking anybody or short-staffing both location. 

Discovering instruments that can assist you automate these duties can prevent time and—you guessed it!—cut back errors. 

When exploring worker scheduling instruments, search for one that comes with auto-scheduling to save lots of you much more time, and mechanically connects to your messaging app—so you possibly can immediately notify your workers of any updates or shifts that must be coated.

4. Streamline payroll with an built-in payroll–timesheet device

A brand new location means extra workers, which suggests extra payroll entries, which suggests extra time spent in entrance of a spreadsheet. And with two areas, it may be difficult to know when workers members are displaying up for his or her shifts and when they’re clocking out.

However with the suitable payroll software program, you don’t need to depend on these arduous processes or guessing video games. 

First, that can assist you handle two areas, you’ll wish to discover a payroll system incorporating a digital time clock. There are three essential the explanation why time clocking is an important characteristic when you’re increasing your small enterprise:

1. There’s no means you will be at each areas on the similar time. Having a digital time clock lets you understand when workers are at work and once they’re operating late, providing you with the peace of thoughts that your online business is operating easily.
2. Save time and kick information entry to the curb with a time monitoring system that integrates along with your payroll system. When your time clock generates timesheets and mechanically converts hours into wages, you possibly can run payroll in just some clicks vs. a number of hours.
3. Digital time clocks assist cut back time theft. While you observe hours with digital time clocks, you possibly can allow GPS location necessities for clocking in. You may give every worker a novel pin, and even snap photographs once they clock in. All this might help you higher hold observe of who’s clocking in when and the place.

Now that you simply’re on board with digital time clocks, make certain your payroll system makes life simpler for you too. That may sound like an outlandish ask from a payroll system. Nonetheless, digital payroll programs ought to be geared up that can assist you with every thing from calculating taxes, submitting W-2s and 1099s, and making certain you’re staying compliant with FLSA record-keeping guidelines. 

5. Rent the suitable candidates utilizing a hiring and onboarding device

Hiring a single new workers member is loads of work. Hiring and onboarding a completely new staff to run your second location? That’s a full-time job.

As a small enterprise proprietor, you understand how vital it’s to rent the proper folks for your online business. And when hiring for a second location, you want individuals who will uphold the tradition you cultivated at your first location. 

To be sure you’re hiring proper the primary time, it’s vital to have hiring and onboarding processes in place. This can be sure that you’re not solely getting the most effective candidates however that you simply’re additionally setting your new hires up for achievement. 

On the subject of hiring, observe these 5 steps to search out appropriate candidates on your small enterprise:

1. Write a job description that precisely conveys what you’re in search of in a candidate and what they will anticipate from the place. Being as clear as potential will assist your posting land within the arms of the suitable folks.
2. Publish your job to as many on-line job boards as potential. Be sure to search for any industry-specific job boards to slender down your area of interest.
3. In case your posting isn’t getting the traction you want, put it up for sale! Placing cash behind your job posting will be the push it wants. 
4. As you progress into the interview course of, add a number of screener questions or a screener interview to make sure you’re spending time on the suitable candidates.
5. Maintain the interview course of brief and candy—having 4 completely different interviews plus a written take a look at is a good way to scare off nice candidates.

When you’ve employed the right candidate, it’s time to onboard them. The onboarding course of is the ultimate step in making certain your new rent succeeds. Onboarding will look completely different for each enterprise, however if you happen to observe the 4 C’s of profitable onboarding, you possibly can relaxation simple realizing you’ve completed every thing potential to set your second location’s staff up for achievement.

1. Compliance. Clarify the entire guidelines and insurance policies of your online business. This consists of filling out all essential paperwork. 

2. Clarification. Be sure your worker understands their position and tasks. In lots of retail and restaurant companies, this entails shadowing a present worker to allow them to be taught the ins and outs of the position.

3. Tradition. This C units the stage for what the tradition is like in your online business. Present them across the new location and think about having them work a number of shifts on the present location to allow them to totally perceive the tradition of your online business in motion. 

4. Connection. At this stage, your new worker begins to attach with different workers. That is integral in order that they start to really feel like a member of your staff. You’ll be able to assist this course of by introducing them to their coworkers, scheduling casual actions, and assigning them a buddy for the primary few weeks who can present them the ropes.

Loads goes into increasing a small enterprise to new areas, however with a little bit of planning and the suitable instruments, you possibly can develop your online business—and your income.

With Homebase, you possibly can streamline your small enterprise enlargement with one simple app. Rent, onboard, and schedule your workers, run your payroll, get assist with compliance, and hold tabs on what’s taking place once you’re away—all from one app.

Optimize your small enterprise enlargement with Homebase

Is your online business fighting including a second location? Get Homebase for simple scheduling, time clocks, payroll, messaging, HR, compliance, and extra — multi function app. Get began without spending a dime.

Small enterprise enlargement FAQS

How will I do know when it’s time to broaden my small enterprise?

You’ll comprehend it’s time to broaden your small enterprise when you’ve got extra enterprise than you possibly can deal with in your present location. When you’ve all the time had plans for future development, there are some things you’ll wish to have in place earlier than you begin interested by increasing:

• A strong staff of workers
• You frequently hit your monetary targets 
• You’re operating out of house
• Your {industry} is rising
• Clients come from far and broad to go to your online business

How do I discover workers for my new location?

Discovering workers for a brand new location will be overwhelming. However with Homebase, hiring has by no means been simpler. Look by way of our library of pre-written, customizable job descriptions after which put up and promote your job to the highest on-line job boards from one simple place. Observe your functions and schedule interviews from Homebase—we make hiring the most effective candidates for your online business simple.

What steps ought to I take to broaden my small enterprise?

The steps it is best to take to broaden your small enterprise will differ for everybody. Some folks might want to think about financing, for instance, whereas others will pay any related prices upfront. However each enterprise can profit from these 4 steps:

1. Be sure your private administration expertise are in good condition. Managing two areas takes loads of juggling, that glorious administration expertise will solely bolster. 
2. Concentrate on growing a powerful managerial staff at your first location. You won’t be capable of deliver folks to your second location, so having a strong staff in your established location that others can depend on is extraordinarily vital.
3. Put a set of standardized enterprise practices in place, together with every thing from scheduling and payroll to hiring and HR. Not solely will this be precious when you have workers working at each areas, however it’s going to additionally make it simpler to copy your success at a second, third, and even fourth location.
4. Take the time wanted to plan. Out of your funds to a location to hiring new workers, opening a second location takes time. Be affected person and provides your self every thing it’s good to broaden your small enterprise efficiently.

What’s the distinction between enlargement and franchising?

The distinction between enlargement and franchising is that franchising is an enlargement plan that depends on native operators—or franchisees—to open new enterprise areas utilizing the branding of a pre-existing enterprise. Whereas this can be a nice approach to broaden a enterprise, enlargement refers to both opening a brand new location or transferring to a bigger location to develop your online business.

How lengthy will it take to open a brand new location?

The time it takes to open a brand new location for your online business is a difficult query to reply. It’s depending on many diverse components:

• What’s the true property market like in your space?
• Do it’s good to take out loans?
• Will it’s good to renovate your location as soon as you buy or lease?
• Is your provide chain in a position to deal with the elevated demand for merchandise?
• Are you able to rent workers on your new location shortly and effectively?

The solutions to those questions—and plenty of others—will enable you to set up a sensible time-frame for a way lengthy it’s going to take you to open a brand new location for your online business.