Running a successful business is one of life’s most fulfilling experiences. Achieving success often leads business owners to consider opening a second location in an untapped market with the hopes of increasing profits. However, before you begin looking for commercial land for lease for a new physical location or commercial glass store fronts, there are some things you need to consider.
A second location requires just as much consideration and effort as your first one. You’ll need to create a business plan for the new location just like you did the first. Before opening a new physical location for your business, get to understand why your business’s location is important.
The Importance of Your Business’s Location
When running an outward-facing business, which means interacting with customers or clients, you must carefully assess how a new physical location will benefit your business. Depending on the nature of your business, your location should be warm, inviting, and elegant. It should create a positive association, so customers and clients think highly of your brand.
When considering a new physical location to expand a successful tech startup, there are some crucial steps you need to take. Finding the ideal site involves more than just locating a structure or property that’s vacant. How you approach choosing your startup’s new physical location will have a major impact on your organization.
For example, you need to think about your target audience’s location. Do extensive research on the different demographic aspects of the local area, particularly the area closest to your potential new physical location. If your tech startup relies on foot traffic, make sure your new physical location is as close to your target market as possible. With this information, you can gather more data about local disposable income, and the potential demand for your goods or service.
You should also do your research on competition and other businesses in the area and zoning issues that can impact your business. Don’t forget to consider how much it will cost to hire movers in case you need to move some resources from your primary business to your new physical location.
Now that we understand the importance of location for a business, let’s take a look at how to expand a successful tech startup with a new physical location.
1. Create a Business Plan
Creating a detailed business plan is perhaps the most important tip for how to expand a successful tech startup with a new location. According to the Small Business Administration, a business plan can adopt two different formats: a traditional plan or a lean startup plan. Both formats outline the objectives and goals of a business in a way that attracts the attention of investors.
2. Outline Your Value Proposition
Your value proposition describes how your services and products benefit customers. This accelerates the growth of your startup as it helps your target market to appreciate the value of each item or service you provide. It also helps distinguish your business from that of your competitors. Your value proposition also comes in handy when engaging investors as it gives them a better understanding of how your product functions in the lives of customers. They’ll also consider how long your target market will need your product, and be on the lookout for ideas with the potential to be successful for years.
3. Consider Inventory Needs
When you’re planning to expand a successful tech startup with a new physical location, your inventory needs will change. Every location needs its own stock. If a client visits your new location and you don’t have the item they’re looking to purchase, you typically won’t be able to get it from your primary location fast enough to serve that customer or client. Use current analytics to estimate the inventory needs of your new physical location and review current and future warehouse and supply chain needs.
4. Evaluate the Market
Even if you find a location that seems to be a great fit for your tech startup’s new base, follow up with research. To assess the market, consider how well your competitors are doing in the area and if there’s room for your business. Only expand into a new market if you’re certain that it’s a good move for your business. Anything less will result in you spending more money than the business is bringing in.
5. Ensure a Steady Cash Flow
When thinking about how to expand a successful tech startup with a new physical location, having the cash to fund the expansion on hand is recommended. If your cash flow is tight, look into peer funding, SBA loans, or angel investors. You’ll need all the cash you can find because setting up your new location will likely involve commercial metal fabrication, commercial roofing installation, or maintenance, among other services. You also need to make sure you’re prepared for worst-case scenarios, such as sluggish months, while you establish the new physical location.
6. Find a Competent Workforce
In addition to finding a reliable workforce, you’ll need to find a manager who believes in your company’s mission and operating principles. If you’re opening a new location in an area you don’t know much about, finding a competent manager with local ties can help you build beneficial relationships in the area and fit in more easily. Look out for events held by the area’s business association and attend to them. Finding a competent workforce is an important tip for how to expand a successful tech startup with a new physical location
7. Create a Process Log
When you expand a successful tech startup with a new physical location, it should function just like your first. To achieve this, put together training manuals for all processes. This includes everything from how to navigate the point-of-sale system to following up with customers. Have a fresh set of eyes to review them to ensure they’re easy to understand, even when you’re not around to explain.
8. Put Together a Training Program
Because you won’t be present at all times to identify and address problems, your new staff may require more training than those at your primary location. In addition to a thorough training program, establish evaluation criteria so you can identify problems early on. Schedule regular check-ins with the new location’s manager to evaluate the performance of the staff. This is a great tip for how to expand a successful tech startup with a new physical location.
9. Plan Out Your Marketing Initiatives
Just like you did with your first location, you’ll want to start promoting your new physical location before opening it up for operations and planning for a memorable grand opening event. Plan for a year of consistent advertising to get your second store’s presence in the new area established. One advantage specific to launching a new physical location is that you already have customers at your first location who can be valuable in spreading the news and perhaps reside closer to your new base. The new market may also present a new opportunity to sell your products and services to other businesses in the area, not just people.
10. Evaluate Your New Competitors
As mentioned earlier, competition is an important factor to consider when looking to expand a successful tech startup. Opening a new physical location in a different market will likely expose you to competitors you don’t currently face at your primary location. Look into how your potential competitors are running their operations in the area, analyze their setbacks and triumphs, and establish how they present different challenges at your new location compared to your primary one.
11. Open Up the Right Way
While a grand opening is a great way of introducing your new physical location, consider introducing your new base with a soft opening. Since this smaller start suggests an incomplete opening and one of the few valid justifications for an incomplete start is progressively moving resources and staff from one location to another, it’s ideal for launching a second business location. A soft opening is also an excellent practice run for full operation as it will reveal some gaps in your processes.
12. Notify the Local Media
Even if your business provides highly specialized goods or services, it doesn’t hurt to get in touch with local reporters, broadcasters, and other media figures who can help get the word out about your company. Don’t be afraid to add some personality and backstory to your pitches. Local journalists like reporting on new businesses in their communities regardless of the goods and services offered, with an emphasis on the company and founder’s narrative.
13. Find Your New Physical Location
Finding the ideal location within your target market is just as important for your new base of operation as it was for your primary location. In addition to rent or purchase pricing, consider demographics, local laws, typical foot or drive-by traffic, and safety. Make sure the market you’re planning to venture into has a sufficient need for your goods or services, and competition from other companies offering comparable products or services is modest.
There’s more to consider other than the external factors of your potential new physical location. The structure itself is equally important. Consider whether you can reasonably fit your operation there, if you can modify it to make it similar to your original location to create a unified brand if the property has a commercial fence, and if the landlord seems reliable and responsive. Before committing to a new physical location, make sure you have satisfactory answers to these “ifs”.
Attempt to speak with other local business owners to establish their satisfaction with the location. Even though it’s impossible to forecast if a new site will be profitable, conduct as much research as you can to ensure it’s the best available option for your expanding business.
14. Ensure the New Location Fits Into Your Budget
Of course, choosing a site that falls within your company’s budget should be one of your key objectives. Note that there’s more to consider when it comes to the location than just the monthly rent or purchase price. You’ll often find other hidden location-specific costs you should consider. These include taxes, economic incentives, minimum wage requirements, utility upgrades, and necessary renovations.
For example, you may find that your new location needs insulation installation, solar panels, and commercial space management systems. You’ll also need to look into the costs of hiring commercial office cleaning companies in the area.
15. Consider Proximity to Other Services and Businesses
Examine the neighborhood’s various establishments and offerings from two key perspectives. First, establish how nearby businesses can benefit your operation by the foot traffic they bring in as those businesses and the people who work there could become your clients, or if you can benefit from being their customer. Second, consider how they’ll improve the workplace environment of your business. Do your employees have access to a diverse selection of eateries in the area where they can go for lunch? Is there a daycare facility close by for staff members with kids? Are nearby shops and services that you and your staff might need easily accessible?
16. Research the Image and History of the Site
Think about how the new address portrays your business. You want your new location to accurately reflect your business’s brand, especially if you’re targeting the local market. Checking out the site’s history is also a smart move. Think about how it has evolved throughout time. If it has hosted different types of businesses and they all failed, conduct some research to determine if the issue was with the location or the businesses. If prior tenants have been quite successful, it’s undoubtedly a positive sign. Check for outward signs of success like property developments, including solar panels. However, remember to temper that with information about the type of business they run in comparison to yours.
When thinking about how to expand a successful tech startup with a new physical location, note that a first location’s success does not ensure the success of a second. You must have commercial space management systems and a strong workforce to prevent issues. No matter how exciting the prospect of a second location is, make sure you can manage it without neglecting your main business.
Your primary business should be generating a steady profit, and your employees ought to be able to manage it while you set up the new location. You should also think about whether you’re okay with sharing the secret behind your success, and if the key to your success is clients who prefer working with you directly. If you believe your tech startup will benefit from having a second location, start planning.