5 top tips for successfully expanding to a new location
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For ambitious entrepreneurs, growth often brings with it the challenge of expanding to a new location.
Setting up in another part of town, a new region or a new country can produce huge benefits for your business, including more customers, better economies of scale and improved inventory turnover.
A challenging time for entrepreneurs
However, expanding to a new location is also challenging and risky for entrepreneurs.
BDC Advisory Services Senior Business Advisor Rony Israel, who was a successful entrepreneur for many years, offered these five strategies to help increase your chances of success.
1. Focus on your personal management skills
Managing more than one location requires disciplined business management skills. "You can't do it all yourself," Israel says. Have an objective look at your strengths and weaknesses. Identify those areas where your contribution is critical and those where you can delegate more responsibility to your team.
2. Develop a strong management team
You need employees you can trust and rely on at your new location. Identify the best people in your company and build a strong team for your second location. If necessary, recruit externally.
3. Standardize your business processes
It's time to get serious about setting up standardized, repeatable processes and management controls across your operations. These can range from marketing and sales plans to HR practices to financial controls and will be a huge help in managing multiple locations.
4. Work hard to motivate and retain employees
Keeping employees motivated is harder when they're working in a different location, Israel says. One risk is they might develop an "us-versus-them" mindset.
The solution is to communicate frequently with all your employees to ensure they feel like one team.
Use technologies such as video conferencing to stay in touch with staff in your new location. Organize weekly or monthly calls to share business results, goals and progress reports.
5. Be patient
Opening a new location costs money and you may feel pressure to earn your investment back as soon as possible. But patience is important. It often takes longer than entrepreneurs expect to break even at a new operation.
Your venture may also take a toll on your existing business as your employees shift focus and get used to new roles. This is why it's important to plan your move rigorously, including careful budgeting and lining up financing.
Seeking impartial advice can make the difference as you undertake your expansion project. A consultant can help with market research, preparing a strategic plan for growth and introducing operational efficiency changes and controls.