Opening a Branch Location
Being two places at once is probably not going to happen. Here's how to open a second location without sacrificing all your time and money.
Q: Ihave a home remodeling business, and I want to expand. I could opena second office locally-there's enough business-but I reallyfeel the best opportunity is in a town about 75 miles from mycurrent office. I want to make sure both branches are successful.How can I run another office from so far away? Should I work parttime at each office? Should I hire another manager? How can I betwo places at once?
A: Youhave described a wonderful opportunity-the chance to be moresuccessful by expanding into a new location. Moreover, you have twoplaces to choose from; it doesn't get much better. You havealso presented, we're afraid, a course of action that needs tobe reconsidered. Not because it's unreasonable, but because wethink you have better options.
Whether you expand locally or to a more distant town, you willhave the same hurdles to overcome. And your questions perfectlyaddress those hurdles. Whether you're near or far away,you'll probably have to divide your time between both places,you will feel as though you're in both offices all the time,and you will have to hire someone to manage the new office. Whenthe inevitable problems crop up, you will find yourself on the roadfor nearly three unproductive hours, each time, if you opt toexpand away from your base. When your new location needs acraftsman or craftswoman, because the local employee isunavailable, you'll have someone drive over, killing threehours and eating into your profits. That's assuming your localemployee can leave his or her current remodeling job site withoutjeopardizing its quality and your relationship with thecustomer.
Assume for a moment that any problem you might face at a newlocal office would also occur at a new remote location. Thoseproblems will cost more and take much longer to fix at your newremote office than they do locally, assuming your expertise wouldbe required in fixing the problems. Before long, that morepromising office will have you wondering why you expanded at all.Time with family and friends will be negatively impacted.
Rod can tell you, from personal experience, remote branchesrequire a lot of effort to run successfully. He founded and hasoperated a multibranch inventory service for 31 years, and two orthree offices don't require a proportionate increase in effort.Quite often, he'll tell you, they require a Herculean effort.Just because a Home Depot or a Wal-Mart can pull it off doesn'tmean every entrepreneur can or should.
We're not here to rain on the American Dream, but we alsobelieve we should listen to our own doubts. Those doubts areinstinctive and not unreasonable. In our opinion, a better courseof action would be to first increase your business activities atyour current office, then expand locally; after all,"there's enough business." Get a feel for operating amultilocation business close to home. Then when your new locationis running smoothly and generating a profit, expand further fromhome. That more distant opportunity will probably be just as viablea year from now as it is today. And if it isn't, there will beothers. After all, good contractors are hard to find.
Rod Walsh and Dan Carrison are the founding partners of SemperFi Consulting in Sherman Oaks, California and the authors of Semper Fi: Business Leadership the Marine CorpsWay.
The opinions expressed in this column are thoseof the author, not of Entrepreneur.com. All answers are intended tobe general in nature, without regard to specific geographical areasor circumstances, and should only be relied upon after consultingan appropriate expert, such as an attorney oraccountant.
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