You deserve to be proud if your small business is humming along with lots of customers, impressive sales, and healthy profits. (It should be a point of pride to survive your first year given that 20% of small businesses don’t).
However, just because your sales and profits look good doesn’t mean it’s immediately time to open another location. Your decision process should be careful and measured.
To be sure, there are a number of perks to opening a new location. You could gain access to new customers and a unique hiring pool. You could diversify and increase your revenue stream. You could create an even bigger name for yourself. There might even be some significant supplier discounts if you find yourself ordering more materials.
But don’t get caught up in the possible benefits. There are also plenty of risks. Accounting becomes more difficult when you have two locations. You new location could suck out all of the life from your original location if you divert too many resources. Most small business experts recommend treating your two locations as separate businesses and finding outside sources of funding for the second location so that you don’t cannibalise the original one.
You should think about why your current location is doing well. Is it in a special location that lends itself to many customers or that reaps benefits from surrounding businesses? Can you maintain your unique brand voice if you expand to another location? Can you transfer your HR and location-specific policies to another location?
Then, there’s you, the owner. If you step away for a couple of months, will your original location suffer? Are you essential to the everyday operations, or is there someone you trust to take the reigns in your absence?