Reading your financial reports and seeing nothing but great results is truly exciting. You see your efforts reflected in every rising figure, which means you do your marketing right and your customers trust in your brand.
From your abundant results, the idea of branching out has surely crossed your mind. The more stores you have, the more customers and revenue you can enjoy. But is your current standing already enough to allow expansion?
If your business is already experiencing the following, then expansion must be your next goal:
1. Regular Customers
Your regular customer base has to be rising. It clearly indicates that the demand for your products or services is consistent. Repeat customers are especially helpful because they prove that what you offer is genuinely satisfactory as you claim. The recurring revenue you receive from them is also what makes your business stable.
2. Your Customers Demand New Branches
If you’ve been pestered by requests about expanding your business, it’s probably time to consider and grant those pleas. You may have a sizable volume of customers who travel long distances just to buy your products or avail your services, so having a second branch near their residences will doubtless satisfy them.
3. Your Profits are Steadily Increasing
If the figure you end up with after deducting all expenses is high and gets even higher on every particular period, it could be a clear indication that you can already afford a second location. If not, you may just invest your profit for other ways to expand, such as releasing new products, adding new services, or extending your business hours.
4. Your Industry is Booming
Industries are also subject to the rise and fall of trends. Just because it’s booming now doesn’t mean it’ll stay that way after a couple of years. Unless it’s been predicted to steadily grow, then you might have to postpone your plans for branching out.
But even if the industry is stagnant, expanding is still possible, only not by branching out. You may instead offer additional products or services that can withstand the test of rapidly changing trends.
5. You Have Your Hands Full
Is your space barely containing your products or service equipment, and staff? Or has there been a need to hire more help? If your business is experiencing those, it’s certainly calling for expansion.
You may look for a new, bigger space to fit all your equipment and staff easily or branch out to have more customers to serve. Your choice must depend on your financial situation.
Factors to Consider Before Branching Out
After assessing your finances and being absolutely certain that you can already afford to branch out, set new goals for that second location. Is to satisfy your existing customers’ demands, or to penetrate a new market? If it’s the former, consider widening your options; perhaps there’s another solution besides branching out, such as offering discounts on shipping costs (if you offer delivery services). Exploring other options other than branching out will save you from potential downfall if turns out that your existing customers aren’t enough to sustain your second location.
If you conclude that branching out is feasible, after all, decide next if you’ll still own and control that second location, or open for franchise. Base your decision on extensive market research and tests such as opening a pop-up store in the location you’re targeting. If your research suggests that a new branch will be highly profitable, branching out would be a safe bet.
With regards to opening for franchising, such would be a wise decision if you’re often troubled by employee issues, like managers resigning after a short period, or worse, being poached by a competitor. With a franchise, the owner will act as the manager as well, and there’s no one more motivated to run a business than its owner.
To maintain or improve your marketing strategies, you can hire professional franchise marketing services. With their help, you may attract more franchisees, bringing your brand to more locations until you top all your competitors.