How To Expand Your Family Business To Other Areas
So when you have a successful family business then what’s next? You might find you are the big player in your local area for the service you provide. So how do you expand or make things better? The answer could be set up another branch of your business in another area, but how difficult and costly could this be? It’s a really big decision and, as such, but you should thoroughly research the risks and challenges ahead before pulling the trigger on this decision.
2nd Location
Where will you look to place your new second location? Do you want it to be in a neighbouring area as this will allow you to keep a closer eye on the way the location is run and even share resources and personnel. The downside of this is if you have kept it reasonably close then you might be limiting the amount of new customers you can attract, to ensure this is not the case then you should carefully analyse where your customers comes from, is it just the local vicinity or do they travel to get to you? Alternatively if you are further away then there is clearly a much larger pool of potential new customers to attract but you are less able to keep a hands-on approach to managing the new location and it’s more of these challenges we will touch on later.
Equipment & Suppliers
So if you are relocating a reasonable distance from your base operation it’s very likely that you will be needing new suppliers, especially when you are running a business that needs industrial supplies or materials. You may even find you are paying more at first as you will no doubt have obtained discount back home by proving your worth as a high volume purchaser. It’s best to get recommendations from local contacts and if you’ve done your pre-planning and research you will have already figured out what the scene is like there, I know that when I first expanded a business away from home I found a great Red Diesel supplier in Birmingham by way of recommendation.
Management
Who is going to manage this exciting new expansion? This is really key as if you don’t have the right management in place one of two things is going to happen. You will either spend a lot of time travelling back and forward to sort out messes or you are going to fail. Make sure you research the management staff thoroughly, get examples of past achievements and meticulously check references.
Franchising
One alternative option is to franchise your brand name out to easily make expansion possible. In this model you find a franchisee who will pay you a fee to be allowed to trade under your name, you will impose certain contractual obligations though to make this work. You should ensure they only trade under your name in this industry sector and have to buy their supplies from you, this ensures that you not only make money on the initial franchise purchase but you continue to make a profit on these sales.
