How to Open a New Business Location

What to consider and steps to take before opening a new business site.

Please note that this article is intended for educational purposes only and should not be deemed to be or used as legal, employment, or health & safety advice. For guidance or advice specific to your business, consult with a qualified professional.

If you’ve made a success of one business location, opening a new location can bring fresh opportunities. It also brings fresh challenges, which can be overcome. Here is a straightforward guide to help.

Decide what type of location you need

Ask yourself the following two questions.

  1. Do you want a fixed space or a mobile one?

  2. Do you want a permanent space or a temporary one?

No matter what stage of business you’re at, it’s always worthwhile considering mobile and temporary (pop-up) options. These can be very economical and flexible ways of getting in front of new customers.

Using mobile or pop up spaces has become a much more practical option over recent years. This is largely thanks to the development of suitable infrastructure. In particular, businesses can now use battery-operated portable terminals to take payments. They can also connect to online resources (internal and external), thanks to the mobile internet.

Mobile and temporary spaces are particularly good options for businesses that are highly cyclical. For example, many food businesses are particularly busy in the warmer months and the festive season. It can make a lot of sense to open at least one extra location at these times, though there may not be enough customers to justify a full-time outlet for the rest of the year.

Even small businesses in more static business areas can often benefit from mobile or temporary spaces. They can be very effective, low-overhead ways of breaking into new target markets. In fact, they can be one form of marketing that actually pays for itself directly.

Research the geographical area where you’d like to expand

Your experience with your current location has probably given you a gut feeling of where you’d like to expand. This can be a helpful start, but on its own it isn’t nearly enough.

Create a proper business plan in place before you open your second location. This involves undertaking a market analysis to ensure the locale really does have sufficient customer demand for the type of business you want to run.

This means that there are enough people able and willing to pay the prices you need to charge to make a reasonable and sustainable profit.

How much you need to charge depends greatly on the location you choose. For example, areas with high foot traffic tend to cost more than areas with less passing trade.

If you’re confident in your marketing, actively look for less visible but still accessible areas. This approach could allow you to lower your prices without compromising your profit.

Figure out what you need from your new location

Your needs are your non-negotiables. It’s therefore important to be as accurate as possible about them. If you list items as needs when they are just wants, this increases your costs. On the other hand, if you don’t list items as needs when they actually are, you may not budget sufficient funds for your actual costs.

Prioritise your wants

Even as a small business, you will have at least a little budget left over for your wants. To deploy this effectively, try to be as clear as you can about what they are and how important they are.

Think about your branding

Are you going to replicate the branding you currently use or do you want to give your second location a distinct identity of its own? If you want your second location to have its own distinct identity, define it.

It’s advisable to pick a new business name as early as you can. This allows you to organise a domain, social media handles and any customised items you need (e.g. branded equipment or employee uniforms).

Start your marketing

You can start marketing your second location before you’ve actually found it. Alternatively, hold off until you’ve actually secured your new location. Either way, start your marketing well in advance of your actual opening.

By the time you open your new doors, your potential customers should clearly know who you are, what you do and why they should care. Ideally, they should already feel like they already have a connection with you.

Build this by taking them along with you on the journey of your expansion. For example, show them behind-the-scenes footage of your search for a second location. Let them see you putting it together and, if relevant, hiring your new employees. Give them some information about your team.

Set up your infrastructure

You already have a full inventory of the infrastructure at your current location. If you don’t, you should make it a priority to compile one. The infrastructure at your first location generally acts as a blueprint for putting together the infrastructure at your second.

You still need to identify the differences between the two locations. You also need to allow time for any necessary administration.

For example, even if you’re renting a store that’s connected to mains water and electricity, get the utilities set up in your name. Also arrange for an internet connection.

You may also need to update some of the software you use. For example, some software is licenced on a per-location or per-user basis. If you increase the number of locations or users, then you need to upgrade the licence. You may also find that some of your current software only works for one location, and needs to be changed.

Review and update your processes

Use the time it takes to install the infrastructure in your new location to review and update your business processes. It’s highly unlikely that you’ll need to reinvent them completely. It is very likely that you’ll make some changes to reflect your expansion into a new location.

Before you revise your existing documentation, make sure that it really is properly up-to-date. Does your starting point really reflect what you actually do now? If you use outdated documentation to lay out processes for your new location, you could set yourself up for a lot of confusion and frustration.

Put your team in place

Once you’ve laid down your groundwork, you should have a good idea of what you need in terms of human resources. This doesn’t necessarily have to mean employees. For example, in some environments, it may be more appropriate to bring in freelancers or agency staff.

  • Freelancers: can be useful if you are confident that there is customer demand but prefer to avoid the administration of hiring employees.

  • Agency staff: can be useful if you’re still in the process of determining the exact level of customer demand. It is usually rather too expensive to be a long-term option.

If you are using employees or even agency staff, remember they need to be managed. Allow for a certain level of management time as well as regular staff time. You also need to allow time for the recruitment process and potentially for training.

Organise an opening event

It’s fine to have an early soft launch of your second location. At some point, it’s generally best to have an official opening event. This gives potential customers a compelling reason to come and discover you. Make sure that you inform local media of your opening event. It is legitimate news for them and can do a lot to get the word out to your customer base.

Information at any stage.

Launch your business

From choosing the right business licence and insurance to setting up payroll and hiring your first employee, we’ve got the resources and information you need to start your business successfully.

Manage your business

Once your business is actually open, learn how to manage its everyday activities. Finance, operations, marketing – they’re all down to you. We give you the help and advice you need to get to grips with these.