Opening a Second Business Location

Posted by Karen Erdelac on Oct 7, 2014

opening a second business locationYour business has been sailing along nicely and you think that it may be time to capitalize on some of the momentum you have built by opening a second business location. Before you start picking out a building in the next town over, first stop and think about the capital it would require.

Watch Your Finances

Small business funding is always a concern for any entrepreneur considering a second location. According to Bloomberg Businessweek, you should not even consider a second location until the first location has paid off its initial funding. You should also make sure that you have ongoing funding options in place to help preserve your company's economic stability. Opening a second location will require significant financial resources and it is necessary to be sure that you have all of your funding options in place before you open a new spot.

Cover Your Cash Flow

Getting small business funding in place to cover your cash flow can be tricky when trying to open a second location, but according to Inc. you should not make the move until your cash flow is stabilized. A merchant cash advance arrangement with a professional organization can give you the cash flow you need to get your second location off to a great start. Without a healthy cash flow and without the necessary support from a strong lender to sustain such a cash flow, you will find opening a second location to be challenging.

Know Your Costs

opening a second business locationAccording to the Michigan Retailers Association, opening a second location is just like starting over.  First, determine all of your start-up costs from facility rent to personnel costs. It is suggested that you consult with a small business funding expert to determine how much start-up cash you will need and how you will get your new location off the ground. Your original business may be a hit in your immediate geographic area, but it is still relatively unknown in the area where you have decided to open up a second location. That means, you will be starting from the ground up; therefore, it will be necessary to calculate your startup costs.

Make Sure You Establish All Of Your Business Habits With Your First Location

Everything that brings your business success in your first location needs to be replicated in the second location in order to maintain business continuity. However, according to FSR Magazine onlineyou cannot replicate your business practices until they are the foundation of your business culture. It may take years before your business establishes its own identity, or how your business operates and its processes; but it is that identity that will be the key to your second location’s success.

When your first location is running smoothly, has taken care of all small business funding, and has a business culture and identity that breeds success — then you are ready to open a second location. The confidence you feel in your business practices and the success of your first location is what you will bring with you to your second location and beyond.

Topics: Growing Your Business