What to do before opening a second business location
Opening a second location for a small business seems like an exciting milestone for the owner. However, it can never be considered as a hassle-free undertaking.
A second business location can have a remarkable impact on your existing business activities. Therefore, you must decide first whether the positive outcomes outweigh the risks or not, only then proceed carefully.
What are the key things that one should consider before opening a second location?
This is the most common question among many small business owners. In this post, I will talk about six important things that you must do to open a second business location.
6 steps to take before opening a new location
The thought of expanding your business is exciting and scary at the same time. Follow these steps to increase your chances of success.
- Check your balance sheet.
- Study the new market.
- Know the local culture.
- Research local laws and taxation.
- Keep your branding uniform.
- Make an aggressive marketing plan.
Without further ado, let’s start the discussion.
1. Check your balance sheet
Expanding to a new location for your business is an expensive affair, as there will be the need for:
- Renting a new office, shop or other space
- Hiring staff
- Advertising your new opening
If you stay well-aware of the amount of capital you may need before taking the leap, you will be in a better position to succeed.
Are you thinking about the cost of business expansion in a new location? Actually, it totally depends on what your business is and the cultural, legal and regulatory environment of the location you have chosen. Carefully list each expense you expect to incur during startup.
Throughout the planning process, you should go through your business balance sheet and cash flow statements to calculate if you can manage all the expenses involved in scaling a business.
Related: Where to find SME business loans
2. Study the new market
When you plan to open a second business in another state or country, you should know that the market and consumer behavior will be completely different than your current business location.
You may face challenges due to language and cultural difference, tax compliance or stiff competition from local companies.
Thus, you must study the new market before launching your business there. But what exactly should you determine in the new market?
Here are a few things to enquire:
- Is there a demand for your services or products in the targeted location?
- Is there any local brand that can give competition?
- What is the best way to find the apt partners or teams?
- How can you create an infallible supply chain?
When you calculate the strength of current demand and measure the expected competition, you can avoid friction as you build a business reputation in the new place.
3. Know the local culture
You can ensure the success of your business in a new location only when you can localize your products or services and match the expectation of the local audience.
Spend time to know the culture of the new place you have chosen. You’ll need a profound understanding of the people there to make your business marketing campaign more effective.
Here are a few ways to do it:
- Study the core cultural beliefs and events of the place
- If there is any language barrier, hire people who know the local language
- Keep tabs on the social platforms favoured by the people in the new location
- Hire a local cultural expert to avoid committing any cultural mistake in your advertising
This will help you add local elements in your marketing campaigns — possibly even your products or services. Eventually, you will be able to create a connection between your business and the customers there. Knowing local culture properly will speed up this process.
4. Research local laws and taxation
If you want to open your business in a second location, make sure you can legally offer your products or services there. Be it a new city, state or country, you’ll need to adhere to the local regulations.
Furthermore, ensure that the location of your choice is acquiescent with the rules regarding taxation and legal business structure. You should also register trademarks and additional intellectual property in the place you are planning to expand your business.
5. Keep your branding uniform
You are going to open a second business location. Your business is the same, so should your branding. Make sure that you use the same business logo, visual design, text fonts, colors and tone that you use to brand your original business location.
Localization is key to success in today’s time. All multinational companies, be it Apple or Pepsi, adopt local marketing strategies while keeping their core branding the same.
6. Make an aggressive marketing plan
Your business may be a renowned name now, but if you do not shout out loud why it is the best option in the new location, no one will take interest in your products or services.
Be it social media, content marketing or printed flyers, you need to customize your strategies in accordance with the local market.
Remember, marketing is essential for creating and maintaining:
Without a solid promotional plan, there’s a possibility for your business to close down due to lack of sales.
Opening a second business location in conclusion
Opening a second business location can drive growth for your small business — if you have a solid strategy to launch the business in a new market. It may seem like a daunting job, but scaling a business is not impossible.
Conducting research is the most important thing to do in order to avoid possible failures.
Having solid business strategies and capital in place will certainly help you turn your dream of expanding your business geographically into reality.