Ready to expand to a second location?10th May 2017
Turning an idea or a proposal into a thriving business venture in your local area can be uplifting and highly rewarding. After many years of hard work and sleepless nights, you can finally tell yourself that the toil was all worth it. Your business has become part of your local community, securing you a reliable stream of customers and revenue. Yet, before you can get comfortable, there’s always that nagging question in the back your mind: ‘What next?’
4 questions to answer first
As business owners, our goal should always be focused on growth and expansion. So the most obvious path from here will no doubt be opening your second premises. But before you decide to go in, all or nothing, the business finance specialists at Rangewell are here offering you some handy tips on how to succeed.
Is your first location profitable?
Generally speaking, it’s better to ensure that your primary place of business is in profit before setting your sights on a new location. Ideally, your business should’ve earned at the very least 6 consecutive months of sustained profit at levels that you’re happy with. You need to be sure that this isn’t just a random spell of good luck or a seasonal trend, the profit must be certain. If not, is now really the best time to open a new branch?
Why do you want to expand?
Another important question to ask yourself is why? Don’t just start a new branch just to sate your ego, you need to conduct in-depth research and know that there’s strong commercial value in doing so. If you’ve expanded your current premises to the maximum, within planning limits, but still can’t cope with the current volume of customers then opening a new branch is a wise move.
Starting a new branch will almost be like opening your first, except this time you’ll have an idea of what’s involved. That doesn’t mean it’ll be easy, it will take a lot of your time, money and energy to fulfil. Just be certain that, in the end, the additional effort will be worth it and yield stronger profits for you.
Is the location suitable?
A question you’ll no doubt give much thought to will be ‘where?’. The whole point of creating a new branch is to tap into a new area and customer demographic that you never had access to before. As such, your new branch should maintain a respectable distance from your original, or else the project will be for nothing as you’ll simply divide your current customer demographic between the two. Nor should it be too far as managing the two will become a challenge.
When selecting a location, see if you have any competition. Ideally, there should no more than 4 competitors in your immediate location. If there are, pose as a customer and talk with local business owners. Without letting on that you could well be their next competitor, establish whether or not there are gains to be had should another branch open there.
Another, more accurate, way of finding this out is by opening temporary stalls or promotional stands, offering passersby free samples of your goods or services in exchange for completing a questionnaire or giving some honest feedback. Besides, if they like what they get you’ll also receive free PR in the form of word of mouth advertising.
Have you secured the necessary funding?
Understandably, opening a new branch of your business is certain to incur a hefty pile of bills. After doing it the first time round, you’ll no doubt understand the challenges and complexities involved, both mentally, physically and financially. Although your initial branch may be in profit, you can’t solely rely on the profits that location yields. You’re going to need finance to back you up, supporting you every step of the way.
But thankfully, no longer a simple startup, you’ll have access to a broader spectrum of business finance packages. Plus, by utilising the services and expertise offered by Rangewell, we can help you source the perfect finance package to suit your business’ needs, including Premises Finance.
Premises Finance is a highly specialised business finance solution that can help with funding to move forward all areas involving premises development. By applying for this means of funding, you can acquire a fully customisable loan to the meet the exact requirements of your chosen business project.
Such loans are typically offered as either Secured and Unsecured finance solutions. Unsecured loans allow you to acquire a lump sum, usually ranging from £5,000 to £250,000, without using key assets, such the premises concerned, as security. However, if you need to get hold of a larger sum you could offer potential lenders a personal guarantee too.
Meanwhile, a Secured loan can help you acquire a much larger lump sum starting from £5,000 up to as much as £1,000,000. However, this time you’ll be required to use assets as a means of securing the product. Should your business become unable to keep up with the monthly repayment scheme, or fail to pay entirely, lenders can claim these assets in order to recoup costs.
Our values are simple – We’re on your side.
At Rangewell our services are clear and transparent. We support a wide range of SME businesses of every shape and size, for finding every type of finance. Follow us on Twitter and LinkedIn for business tips and tricks, and feel free to call us on 0203 637 2340 if you’d like to chat about what we can do for you.
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