Expanding your business takes serious strategy and detailed planning. While it might feel safer to rely on the known, once you hit the profit ceiling of your current location and consumer market, there’s nothing to do but ride the status quo. Whether it’s ambition or necessity, expanding to new locations is part of the natural life cycle of most businesses. Considering the amount of capital you have to leverage for your expansion, you need to be very careful about how you move forward. Here are the top mistakes you need to avoid when you are expanding your business to new locations.
Ignoring the Cost of Utilities
One of the easiest ways to lose money on a new location is to ignore the cost of utilities. When you first scouted the new location of your business, you probably inquired about the price of basic utilities such as water, gas, electricity, and more. But if you don’t have a dedicated team to pour over these bills when they hit your desk, you can easily miss small mistakes and end up paying more than is necessary.
A solution for this problem is to bring in utility auditors to look at your locations. This is a great option if you have locations in multiple cities that all have unique utility structures. Another option is to create a dedicated team and hire people who understand the critical nature of this part of your business.
Performing Weak Market Research
While expansion is exciting, you shouldn’t overlook the importance of market research. As a business owner, you might see expansion as your top priority, but it’s not something you can’t pursue without thorough and detailed market research. It’s not enough to simply identify a place you can set up shop. You need to understand who your competitors are in that area as well as who your customers are. It’s important to take your time on this step in order to craft an effective business plan for your expansion needs.
Hiring Too Many People Too Quickly
Another common mistake that you should avoid is hiring too many people too quickly. This is another issue related to pursuing expansion at a fast pace. If you gave yourself an internal deadline to open up a new branch in a new location and you have to rush to fill your staffing needs, there’s a good chance that you won’t be able to attract the right talent. This can result in you having to hire multiple people to do one job competently. Another possible consequence is that you might see high turnover until you can get your ideal team in place.
Staffing issues cost money and take up unnecessary time. The stress on your Human Resources team is going to add tension within your company, and it will distract you from helping your new business succeed. That’s why you have to carefully design your expansion so that you will have minimal new hires and you can focus on talent instead of numbers.
Neglecting Customer Feedback
When it comes to expanding your business to new locations, you should never neglect customer feedback. Customer feedback is a vital tool that can help your business either succeed or fail. When your customers have something to say about your staff or your products, you have to take them seriously. It’s not simply a matter of educating your customers and waiting to see if they fall in line with your sales goals. When something isn’t matching up, your customers will let you know, giving you the chance to take action and adjust your approach.
Forgetting To Track Progress
Once you expand to a new location, it becomes incredibly important to track your progress. If the tools you currently use are not capable of responding to the new bandwidth you’re dealing with, you’ll need to upgrade your software and capabilities.
Monitor your new location as if it is the first outlet of your business. You will need every available piece of data so that you can create flexible growth strategies for your new location.
Make sure you celebrate your accomplishments and include your team too. But at the same time, keep these practical strategies in mind.
