Tommy Wyher — February 20, 2019 Running a company that is a success in its local area is impressive, to say the least. Certain entrepreneurs will never be satisfied until their company is a household or national name. The risks that come with expanding the business across the country with new locations are immense. A failure during expansion can hurt the base business financially as well as the brand as a whole. For these reasons, it is imperative that specific details are handled the business is set up for success. The following are things to take care of and think about when expanding nationally with your company.
Assess Current Cash Flow
The last thing that any founder of a company wants to do is to cripple their base business’ performance due to the lack of cash flow. This can happen quite easily as problems tend to come up whether it is getting licenses in a state or finding an affordable office rental space. For extremely profitable businesses it is going to be necessary for the base location to support the new locations until they become profitable. Putting together a realistic budget and projections for the opening of a new location can be a huge help. You might find that you should wait a few years before expanding just to be safe.
What Cities To Open In First
Opening locations with an hour or two of the original location is a popular thing for a business to do. This allows management and the owner to have a hand in setting up the business as they can visit the new location frequently. When compared to a cross country move this helps mitigate risk and can help initial business. For example, a restaurant chain that slowly expands will have far more brand recognition than a chain that starts in Tampa then expands to Seattle. Cities with top talent in a specific industry also need to be considered as a marketing company would probably opt for Los Angeles or New York City. Sit down with a list of potential cities to expand to thinking about living costs, demographics, and benefits of moving to the city. This will help easily eliminate certain locations but this does not mean these cannot be explored in the future.
Ryan Hibbert, the CEO of Riot Hospitality Group expanded to new locations with restaurants. The restaurants were successful with a taco based restaurant being successful in Chicago while a whiskey/barbeque restaurant was immensely successful in Nashville. This a great example of knowing the landscape of a city as a taco based restaurant might not have been quite the success in Nashville which is known for its barbeque.
Which Staff To Send To New Locations To Preserve The Brand
The most important thing is to preserve your brand of customer service and quality services/products. Failure to do this can hurt a business immensely with negative reviews pouring in online. The consumer is more informed than ever so if a business has a low quality of service in one location, the entire company looks bad, not just one location. Pick staff that you trust to run the new locations that come from the original location. This will preferably be those that helped build the company as they understand the growing pains associated with getting a location profitable. If the right cities are picked you might have a plethora of employees willing to move for this opportunity.
Regional Marketing and Advertising Differences
The same marketing and advertising plan that worked at the original location of the business might not work in a different part of the country. For this reason, it is important to hire a marketing professional from that area to help create a buzz. Creating a buzz in a city where a location is about to be opened could be the most important thing the marketing and advertising team can do. There are very different data trends when it comes to ROI by region for the same campaign so analyzing data could help create an actionable plan.
Honestly Understand If You Are Really Ready
Running one location can be difficult enough for an entrepreneur let alone 10 locations across the country. Ask yourself the honest question “Am I really ready” and if there is any doubt hold off on expanding for the time being. The time commitments and extra travel required can be hard on a person especially if they have a family. Write out a list of how this will impact your personal life and not just your professional life. You do not want to regret successfully expanding due to the extra duties associated.
There is plenty to worry about when expanding nationwide but the rewards can be immense. Take the time to think about the above and use the tactics to help ensure success for the expansion. Your company could be a household name in a matter of years if all goes well!
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