When you outgrow one location, expanding to another seems like a logical plan. However, there are certain things you need to know before investigating a new location. Here are a few questions to ask yourself when you are considering this huge step.
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Is it necessary?
Telecommuting is so easy now that it is almost ubiquitous. It makes it easier for the boss to avoid micromanaging, and usually shortens one’s commute. You can bet that your employees would love the arrangement’s flexibility and casual charm as well. Telecommuting is just one way your company can get maximum value out of one location. Another option is to expand into the internet, which requires almost no space at all but has huge potential for profit. Think outside the box and consider whether your company really needs and can justify the extra space. Offices just aren’t mandatory anymore; well known blog treehugger.com sold for $10 million without a single location or even an office chair to their name.
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Can you afford the overhead?
Opening a new office doesn’t just mean more employees; it means a higher price tag as well. Not only will you need to pay for the actual location, you will need electricity, phone and internet, plumbing, office equipment, and a second set of all of the supplies you buy for your office right now. Further, you will need new staff as well. This may take a sizeable chunk out of the profits you thought you would reap from the expansion.
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Will your brand work well in another area?
Whether you are adding an office in the next town or the next block, you should consider whether your brand and logo design are universal enough to make the transition. Talk to a logo designer if you have questions about this.
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Is your business stable enough to do double duty?
There will be a period of time, in this economy perhaps a long period, when a second location will mean that you do double duty in every possible way. Your current profits will need to cover twice the expenses and your managers will need to do twice the managing. Almost everything that you do for your business will need to be done doubly. Eventually your new location will be able to fend for itself, but this could take a long time. Your business needs to be in a place to absorb the extra work and payout.
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Will a second location improve your business’s bottom line?
There are a few times when having multiple locations can be a real asset. For instance, brick and mortar retail locations can only make so much profit in one area; branching out is the only means to expand. Similarly, a second location might look good if you are trying to sell your business or to get a loan for expansion. However, in many modern businesses a second location will not bring the prestige you think it will… and it comes with a heavy price tag as well. While these are not reasons to stay a one-office operation forever, it is important to take this huge step with a lot of forethought.
