So You're Thinking of Expanding Your Business

Is one of your business goals to open a second facility? If you own a class-based business it’s probably crossed your mind at least once. But do you know where to start? There are a lot of logistics involved with expansion, and it's not something you should jump into lightly. Before you start, here are a few things to consider.

Does a second location make sense?

How’s business at the location you already have? When examining if a second location makes sense it's important to first deep dive into existing active locations and look at their overall health. With business booming, maybe you're ready to make your business a multi-site business. To err on the side of caution, it's also important to examine all available ways you may grow your existing location–for example, by expanding your class offerings. If you open a second location how will that affect the client base at your current site? Do a little soul searching, as well as some business analytics, to determine if a second facility will bring you closer to your business goals.

Is there market interest?

Would you have a solid client base in the new location? It’s worth doing some market research in your target area to find out if there is solid interest in the services you provide and what the competition looks like, before you get any further in the process. If there is heavy competition, but a strong demand for your service, then you must anticipate how you will break through the hardest barrier to entry: stiff competition. Be prepared to examine how you may set yourself apart from competition in the area and what marketing budget you will need to be successful.

Can business work without you there?

You can’t be in two places at once, so your business needs to be able to function even if you aren’t there. You’ll want to have trusted staff in place to handle the everyday management.

Can you afford it?

As you already know well, it takes a lot of investment to start a new business. Can you afford to open a second location, while maintaining a high-quality client experience at your original facility? Chances are you’ll need to look into a business loan. Any business loans will need to be factored into your decision to open a new site.

Pike13 partners with small business lender Funding Circle to help business owners find the resources they need to expand.