2017-03-29 00:00:00 Decision Making English Consider whether the advantages of opening a second location would justify the investment of time and money necessary for such an effort. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/business-owner-reviews-construction-of-new-location.jpg https://quickbooks.intuit.com/ca/resources/decision-making/open-second-location/ Should You Open a Second Location?

Should You Open a Second Location?

5 min read

When you get your small business off the ground and achieve success, you might start thinking about opening a second location to expand your customer reach and potentially increase your revenue. Before making that decision, consider the reasons why your current location contributes to the success of your business. Ask yourself whether similar conditions might exist in a new location. Conducting a thorough analysis helps you decide if the move is right for you.

## Pros of Opening a Second Location

You probably already have reasons for wanting to expand your business to a new location. Whether you want to open a new shop across town or in a new city or province, you expect the new location to reach more people and boost your potential for sales. Several other potential benefits of opening a second location include:

* Improved brand exposure by bringing your company to a new area where residents lack awareness of your business
* Easier access and convenience for customers who live in a different part of your city or in a completely new city
* Opportunity to tap into an area with your ideal demographic
* Improved experience for your customers if existing space limitations prevent further expansion
* Accommodation of more customers due to space limitations at your current location
* More staff members with more potential skills to help support your business
* Ability to spread your costs of doing business across more than one market

## Cons of Opening a Second Location

You have several reasons to expand, but you also need to look at the potential complexities of branching out to a new location. The move comes with some challenges worth evaluating. Make sure you can handle or overcome any potential cons of the expansion before you start. Potential issues include:

* Additional financial investment, including lease, space improvements, equipment, furniture, signage, inventory, and licencing fees
* Increased demands on your time from operating two business locations
* Fewer chances to interact with customers personally if you split your time between two locations
* Additional strain on your existing systems, such as information technology and payroll, that can force pricey upgrades or complete replacement
* Extra insurance costs that can exceed your current costs if your new location has more space
* Logistical complexities with staff and resources split between two locations
* Potential change in the workplace culture with employees in different locations and you splitting your time

## Finding the Right Address

If you decide to expand, your experience at the current address can provide insight about the important characteristics of a superior location. It’s important to choose a [business location](https://quickbooks.intuit.com/ca/resources/staying-competitive/why-location-matters/) that sets you up for success. Consider what works well about your current location and the things you think might improve it. For example, if your current location offers convenient parking and easy access to public transportation, you make it easy for potential customers to reach you. Finding those same characteristics in a new location can increase the potential for success in your expansion.

Other current characteristics of your current location might help you decide what to do differently when finding your second location. Say you own a retail shop and want to host demonstrations or classes related to the items you sell, but your current location proves too small to accommodate those activities. You might look for a larger space with a setup that allows for a small classroom or demonstration area.

The actual location is also important, not just the space and layout of a potential building. Consider the following factors that can influence the success of your new location:

* Amount of [foot traffic](https://quickbooks.intuit.com/ca/resources/marketing/measuring-foot-traffic/) in the area
* Visibility of the location
* Parking or accessibility to public transportation
* Concentration of your target audience in the area
* Competitors located nearby
* Costs associated with the location
* Readiness for your business without extensive renovations
* Current zoning
* Accessibility for inventory or material deliveries
* Local regulations if you expand to a new city or province

## Small Business Alternatives to a Second Location

Opening a second location isn’t your only way to expand and grow your business. Small business owners have other opportunities that help them increase revenue without taking on the financial costs and managerial responsibilities of expanding. Simply hiring additional employees or [outsourcing specific tasks](https://quickbooks.intuit.com/ca/resources/outsourcing/outsourcing-grow-small-business/) to independent contractors can boost your company’s productivity and raise revenue far beyond those modest investments. Before you decide to hire more employees, you should consider using [performance management software](https://quickbooks.intuit.com/ca/resources/technology/using-performance-management-software-for-small-business-development/) to manage your existing team more effectively.

Other approaches to increasing your existing business’s customer base include expanding your product line or offering additional services to generate new revenue streams. You might add a new product to your lineup to increase revenue at your existing location, or you might offer classes or setup services related to your business. If you sell software, try promotions, such as software setup for an additional fee. Providing consulting or auditing services can also work, depending on your business. For example, accountants might offer audits for small business accounting systems to help them figure out ways to improve. These additional services have the potential to generate more income without the need to open a new location.

If you run a brick and mortar business, you might consider ways to expand without opening a new physical location. For instance, you might add an e-commerce branch to your retail business so customers in other areas can buy your products online. This eliminates physical limitations, allowing you to sell all over Canada and potentially other countries. If you sell handcrafted goods in your shop, you might also sell on [Etsy](https://www.etsy.com/) to tap into an existing customer base. You can also offer your wares on Amazon and established marketplace websites. If you own a restaurant or diner, adding a [food truck](https://quickbooks.intuit.com/ca/resources/growing-business/restaurant-expansion-food-truck/) might help you reach more people and increase your flexibility with lower costs than a new physical location. You can also expand into catering or offer special higher-priced events, such as food and wine pairing or upscale meals on certain evenings.

Growing your business, either through a second location or alternative expansion options, helps you increase your revenue, but it also comes with a financial investment. Keep track of all your business finances in one location to keep your expansion on track. The [QuickBooks Self-Employed](https://quickbooks.intuit.com/ca/self-employed/) app helps freelancers, contractors, and sole proprietors track and manage business on the go. Download the app today to take charge of your small business finances.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

When to Open a Second Business Location

It is understandable that a successful small business owner would want to…

Read more

How To Import & Track Expenses Automatically for Maximum Productivity

Manually entering business expenses and other data into your accounting software can…

Read more

Should You Open a Gym?

If you’re one of the many people who are obsessed with health…

Read more