Small Business Tips: When Should You Get a Larger Location?
As a business grows in both popularity and production capacity, there will come a time when the physical location that they began with no longer supports the level of business that they are handling. At this point, business owners will either need to open up a second location or move to a larger one in order to make the most of all the potential business they can create. In the event that they opt to go with a larger location, there are a few things that they need to get a handle on before they are able to commit. Fumbling the transfer of their business to a new area can not only disrupt cash flows and waste liquid capital, but it can even lead to them losing business to competition during the down time of their move. In general, business owners should begin to consider moving to a larger location when they are unable to handle the capacity demands imposed on them by business growth. If the problem is related to production rather than physical space, then hiring a new employee or purchasing new equipment may be a stronger alternative to moving with the large potential it presents for disruption.
Market research should dictate the location of your larger area. Don’t allow opinion to drive your business to a new area where your market may not actually be stronger. Instead, business owners should weigh the choice to try and stay close to their current location or to move to a neighborhood where they can grow further. Take in the potential for foot traffic that your new location would get as well as the relative visibility of your location to those passing by. If it is difficult to find your business once it has moved you may run the risk of losing some of your long time customers.
Think about what square footage you require in order to serve all of your customers and account for all of your employees, factoring growth into the equation. When you make the leap into a larger space for your business, you shouldn’t have to move again for a while. The cost and time associated with moving a business is usually considerable, so planning for the foreseeable future in terms of growth when you change locations should be a real consideration on the part of small business owners. You may also want to think about the needs for your floor plan, for example, a retailer may need to have considerable space allocated to warehousing goods apart from the space where items being sold are displayed.
Photo Credit to Jackie on Flickr