th images menu user export search eye clock list list2 arrow-left untitled twitter facebook googleplus instagram cross photos entrep-logo-svg

5 things to consider before you open more locations

Opening more units can equal big bucks, but only if it is done right.
By Kyle Zagrodzky |


There is no thrill quite like running a successful business—and no failure quite as painful as thinking you can replicate it, only to fall short and risk losing it all. Launching a single successful business is hard enough, but once you have proven your concept works, the allure of franchising starts to pull too many business owners in a dangerous direction.



Opening more units can equal big bucks, but only if it is done right, and most business owners are so focused on the rewards that they lose sight of some of the pitfalls.


Still, you cannot become a mogul unless you make a move, so how do you know if you are ready to take another bite out of the entrepreneurial apple and open another unit - or two, or three, or 40?



1. Ask yourself why you really want to expand.

Everyone reading this has natural drive. You want to do more, be more and have more. However, this same drive often steers people into bad places when it comes to assuming that another location is the solution to their need to grow.


Do not make the mistake of believing that more is always better or that more units will guarantee more profits. This is not like Monopoly, where the first to open the most hotels slam dunks the game.



Every business is delicate, and a second location means you are spreading yourself thinner and opening yourself to double or triple the potential pitfalls. Before jumping into a second storefront, explore every option to satisfy that inner need to do more. You might find an easier, safer path to fulfillment that will protect everything you have worked for instead of put it at risk.



2. Never underestimate the power of the secret sauce.

Business owners often believe so deeply in their brand that they do not see how much they personally influence their store’s success. When you try to duplicate a business, whether it is a franchise or a small storefront, you have to be ready to take on a completely different role.


Related: 9 Questions to Ask When Assessing a Market


If your first unit has been fueled largely by your personal touch, then spreading yourself too thin could mean both units suffer. Before growing, you have to ask yourself whether you have the right people in place to take over some of those key roles you have always managed, and whether you think you have the leadership skills to pass on the core magic of your secret sauce.




3. Are you absolutely confident in your first business?

Many times, the secret sauce includes all those small tasks and personal touches the owner contributes that employees may not even know how to replicate. Before you even consider opening a second business, you should reflect on your existing processes. How solid are they?



Related: How to Know When to Grow


Here is the basic test: If you were to go on vacation for a month overseas with little to no contact, would the business crumble? If you know in your gut that the entire thing would come crashing down in less than a week, your processes need a lot more work before you start opening doors to a new location.


Processes and operational protocols should be so smooth and streamlined that employees know exactly what to do and everything runs relatively well without your immediate presence. If that is not the case, a second location will stretch you too thin.



4. Put the right people in place before you make a move.

Being an outstanding single-unit business owner does not mean you will automatically ace being a multi-unit business owner. To open more units, you do not only need managers, who can help run each business, but you also need to hire all new staff positions, including everyone from the sales team to cleaning crews.



Related: Netflix to Continue to Look at an Entry Into China


A multi-unit business owner not only has to be ready and willing to step back at the right times but also has to be willing to train people to run the new units using the same proven systems as before. Being a multi-unit owner means you have to have a specific set of leadership and oversight skills, and even if you have them, you want to ask yourself if you will actually be happy in a different role.



5. At some point you have to quit thinking, and pull the trigger.

If you have done all the homework, balanced the financials and still cannot get rid of that nagging sense that you need to launch a new location, then sometimes you just have to go for it.


Being prepared is great, but overthinking can lead to stalling, and you do not want to wait so long that you miss an opportunity. If you are confident that you will enjoy a revised role, have the right people in place and know you can trust your financials, you might just have what it takes to build your own empire.





Copyright © 2016 Entrepreneur Media, Inc. All rights reserved.

This article originally appeared on Minor edits have been done by the editors.


Photos from Thinkstock

Latest Articles