Your small business is flourishing because you’ve put in the hard work. What’s next? Many entrepreneurs expand their business to multiple locations.
You need to be sure that you are ready to scale to multiple locations before you make the leap.
Consider the risks. Rent, utilities, insurances, marketing, personnel, supplies, inventories, equipment, technology, etc. will all cost more in a new location. Your focus will also be divided between your new and old responsibilities. While your new office requires your full attention, you must also pay close attention to the current operation of your business.
Consider the positives. Open multiple locations to increase your company’s profile, introduce you to additional markets and customers. It should also lead to an increase in sales and profits.
When are you ready to expand your business to multiple locations and how do you know?
Are you able to fund your expansion and maintain the current location? Your new location is unlikely to earn enough money immediately to cover your overhead. Your existing business must also support your new venture.
How well is your business currently running? How involved are you in your business? How much can your business survive without you? How long will you be away?
Are you able to rely on a team of professionals to maintain your current location? Are you able to rely on someone else to be in charge? You’ll spend most of your time in the new location, so you need to make sure that you have employees who are capable of running the company.
Are you unable to meet the demand for your services or products at your current location? Do you plan to duplicate your business at this new location? Are you sure that a second business location will not cannibalize your current sales?
Will you have to change your offering to appeal to the new demographic or are they similar? Are you ready to make that change?
You should take action if you are able to confidently answer these questions.
Follow these steps to ensure that you are always ahead of the game when managing multiple locations:
Standardize and document all your operational procedures
Documenting your business is not trivial. You want to document everything, whether it is about managing employees, ordering stock, handling complaints from customers, participating in local events, planning office procedures or menus. These details will help you to hire employees at your new location, and also those who are responsible for running your existing business.
Imagine that you are going to franchise your company and must create a detailed road map so others can follow. You’re essentially systematizing the operations of your business.
Update your employee handbook and operations manual. You should do this before opening any new locations.
Consult legal and financial experts for a review of operational details
It is easier to expand your business within the state you are currently located in than it is to move out of state. If that is your plan, you should consult an attorney to make sure your company’s name, logo and other intellectual property are allowed to be used in your new state/states.
If you plan to expand outside of your state, you should familiarize yourself with employment laws in that state. This will ensure you comply. Businesses with employees in another state may also be subject to different regulations.
It’s also a good idea to consult your accountant and attorney to ensure that the business structure of your company is correct. It is important to choose the right business structure for a company with multiple locations.
Ask your agent if they can cover the new location/s, or if separate policies are needed.
Build your team
You are building (or multiplying) two or more strong teams of managers and staff. You should have a solid team of reliable and trustworthy employees who you can trust to run your original business, since you will likely be spending most of your time in the new company when it opens.
You can ask some of your most experienced employees to transfer (even temporarily) to the new location. This will ensure that you have both new and experienced workers. You may need to offer incentives to encourage employees to move (or cover their travel costs) depending on the distance between your two locations.
You should ensure that the team managing the original location has the same training as you and is confident enough to take decisions without having to call you every 10 seconds. Your current employees in the new location should be able to mentor new hires.
You’ll need a strong team of managers at each location if you want to focus on the business and its development.
Create a solid communication system for your team
It is essential, as stated above, that your managers have the authority to make decisions. They also need to be able to communicate with you when they feel it is necessary.
You should still visit the original business location once or twice per week, even if you are busy establishing your new one. Be sure to let your team know that you are always available via email, chat, instant message system, phone, or text. Consider creating an intranet for your company to keep employees updated.
Meetings with key managers and employees can be held via video or conference call. Your teams should also submit weekly reports.
Use your communication system once you have it. One study found that businesses with multiple locations spent an average of 17 hour a week repeating or clarifying communication.
Team-building exercises can help you to promote your company’s culture and encourage your employees to participate
It is harder to keep your team motivated when your employees are spread out across multiple locations. Your entire team should feel connected to your business, your vision and your mission.
Online and in person, hold all-hands meetings. A few fun company events per year are a great idea. Team-building activities include a holiday party, a company picnic or bringing a group to eat at burger king.
Invest in technology and tools
Your business will function better if you use the right technology. Cloud-based apps and software are essential. Software and apps are available for companies with multiple offices, depending on their type of business.
These tools save time and allow for less errors. They also free you up to think big and do revenue generating things.
Holding in-person sessions or online webinars will help you train your staff on how to use technology. If you have staff that works remotely, ensure they are equipped with the tools necessary to stay connected and secure, as well as get their work done.
Plan for Success
When you’re considering expanding your business to multiple locations, it is important that you do the necessary research. It’s not enough to have a successful business in one location for it to be equally successful elsewhere.
To run multiple businesses successfully, you need to prepare. This is true whether it’s a restaurant, store, fitness center, salon or office. If you plan well, you can achieve success, regardless of whether you are opening one location or a dozen.