Considerations When Opening a Second Business Location


Are you thinking about opening up a second location for your business? Here’s what you should consider before committing.

Questions to Ask Before Expanding

Ask yourself the following questions before you take the plunge and expand your business to an additional location.

  • Can you afford it?
  • Is there a market for you?
  • Can the current supply chain support expansion?
  • What are your goals for a second location?
  • Will it be a franchise, a partnership, a corporation, etc…?

Signs You’re Ready to Open a Second Location

If business is booming, you might feel the pull to open another brick-and-mortar store to serve your customers. But are you really ready? Look for the following indicators that it’s time to seriously consider expansion.

You’ve Run Out of Room

Whether it’s your lobby, offices, or warehouse that’s starting to feel cramped, it could be a sign you’re ready to expand. If you can’t reconfigure your current facility, a second one may be the next step.

Your Customers Are Coming From All Over

Are you such a hotspot for customers that they’re trekking to your shop for your products or services? If you can’t meet their demands online (for example, if you’re a salon), it might be time to open a second location to better serve customers in another city.

Or, maybe you’ve done some market research and have found an additional demographic that you can serve. If your customer base is present and there’s a need for your product/service elsewhere, it’s probably time to analyze your business to see if you can scale it for an additional location.

According to Guide Technologies, this type of data-driven decision-making is important; it ensures you’re not making assumptions about your business. Just because your product seems popular doesn’t mean it will do well in a new market.

You’ve Perfected the Process

When you’ve fine-tuned how your business operates and have dependable staff to keep things running smoothly, you might be ready to open a second location. Consistency is key, whether you’re franchising or opening a sister store. If everything is streamlined, it’s easier to open a new location.

Current Cash Flow Can Support It

Are you making enough revenue at your current location to support opening a second? Additional branches can take a while to get off the ground, so make sure you have enough capital and cash flow to sustain another location.

How to Open a Second Business Location

Now that you’ve reviewed your current business plan and have decided it’s financially feasible to open a second, what do you do? Are you going to move into an existing space or build something new? If you have any plans to remodel or construct a storefront, you may need to budget for a company like Anderson Engineering to conduct a survey and ensure the space is a good fit. Just because a location is in your ideal geographical location doesn’t mean it’s meant to be.

Choose a Location

You may need to scout several locations before finding the perfect one. You want accessibility and convenience, all for the right price. You also want to ensure you update your Google Listings when you expand your business. Be sure customers know you’re in more than one location, and what the contact information is for each. Find tips for making the most of Google Listings from Gravitate One HERE.


  • Word of mouth
  • Corporate real estate listings
  • Pound the pavement

It will probably take time to find the right spot for your expansion, but since location is the golden rule of real estate, it usually pays off.

Establish Marketing and Business Plans

Based on your market research, you should be able to move forward with strategies to achieve success in a second location. Be sure your marketing and business plans include the following:

  • Competitor analysis
  • Demand for product/service in the new location
  • Availability of resources in the new location
  • Defined goals for the new location
  • Potential problems a new location could face
  • Solutions for challenges the new location could create

Hire Staff

You don’t want to poach your existing staff and move them over to a new location. Instead of finding yourself short-staffed and stretched thin, be sure you hire and train new employees prior to opening your second location. Also, have a manager who can act in your stead onsite since you can’t be in both locations to oversee everything yourself.

Stock the Shelves

Be sure you don’t open before you have your products stocked and ready for purchase. Shipping delays and material shortages in recent years can make it harder than before to create a timeline for a grand opening. If you’re worried about having physical products available when you launch, consider integrating pre-orders into your business plan to drum up interest and secure orders.

Expand Your Operating Systems

A second location may require that you purchase additional software to support your day-to-day. Or, expand your existing operating system to allow multiple sites to stay organized. Everything from employees and vendors to inventory and accounting should be ready to go before you open the doors.

However you manage your books, it’s usually best to keep separate finances for each location. This makes it easier to ensure the right inventory gets delivered to the right location and makes it easier to track how well each branch is performing.

Soft Launch vs Grand Opening

A soft launch is the planned release or opening to a select audience. It’s a way for businesses to test operations before going fully public. It can give staff a trial run before a more hectic opening day, or it can introduce some but not all products offered by a brand. Determine whether or not you want a one-and-done grand opening or a soft launch. Your marketing will vary for a soft launch vs a grand opening, so consider these options when developing a game plan.

As long as you’re working with accurate data, you should be able to forecast how feasible a second location is for your business. With market research, the right location, and a thoughtful business plan, you’re on your way to success.

You May Also Like

About the Author: John Watson

Leave a Reply

Your email address will not be published. Required fields are marked *