Opening a brick-and-mortar location is an exciting milestone for a business owner, and it’s even more exciting when business is booming. You’re seeing tons of new customers, there’s a rising demand for your products, and your company has an amazing cash flow.
When your retail business is thriving, it’s only natural for you to consider expanding from one physical location to multiple locations. But how do you know when it’s time to take the leap? While it will vary from business to business, there are certain aspects that apply across the board.
Below are some things to keep in mind as you expand your retail operations.
What To Consider When Opening a Second Store
Before we get to the operational details, it’s important that you determine if you really are ready to open a second location. Some things to consider include:
Finances — Determine how you’re going to finance your new store — use current cash flow? Take out a loan? — and how that might impact your first location.
Competition and Market — Do some market research on the new location. What are the neighborhood demographics? What’s the competition? How do these differ from your other location, and how will this affect product mix?
Laws and Regulations — If your second location is in another city or state, you’ll likely be dealing with a new set of laws and regulations, so make sure you’re up to speed.
Staffing — In the early stages, it’s a good idea for you to handle the hiring and store management yourself so you can identify any challenges early on and work to correct them. However, a local’s intuition always helps, so you might want a second-in-command to run the new store if that person is more knowledgeable about the area.
Now that you’ve made the decision to open that second location, keep the points below in mind as you move forward.
Take Care of Your First Store First
Before venturing to other locations, retailers must make sure that their first store can run smoothly without them constantly being around. Setting up a new store will take up the majority of your time, which means you won’t be around to give your daily input and oversee everything.
Your first store should be totally self-sufficient — running like a well-oiled machine that can function without you — before proceeding with a second location.
The easiest way to make that happen is by having the right people in the right places at the right time. Make sure your manager(s) is given the knowledge he or she needs, and has the experience, to run the first location on his or her own. All employees should be competent enough to successfully do their job well without you there to supervise.
Use Your Experience, But Start Fresh
While you have some general retail knowledge and experience gained from opening and operating your first location, consider opening this second location as if you’re starting a new business from the ground up. Yes, it’s a similar operation, but the finer details are going to be completely different.
There will be different competitors, different zoning issues, maybe even different laws, depending on the location. Treat your second store as a brand new business, because that’s really what it is. This includes creating a comprehensive business plan that outlines your goals, objectives, and steps you will take on your path to success.
Establish Standard Operating Procedures
Each store will have its own unique flavor, but there should be a standard set of procedures in place to establish consistency not only in operations, but in the customer experience. You want the look and feel of both locations to accurately represent your brand. As such, retailers should outline procedures for the following:
Store Merchandising — This encompasses the look of your retail locations, including what fixtures will be used, how items are to be displayed, and how often displays and layouts are updated.
Payment Procedures — There should be a standard set for all monetary transactions. What kind of payments do you accept? How do you process returns? What are the register closing mandates? For best results, use the same EPOS system across all your locations. In addition to
keeping all your payment data in one place, have one platform keeps the customer experience more consistent.
Customer Service — This goes beyond smiling and being friendly with customers, and there needs to be a guideline as to your employees’ general behavior. Outline what can and can’t be said, how to handle difficult customers, and how they’re expected to create a positive customer experience.
Supply and Inventory — Maintaining adequate storage and a steady flow of inventory is critical so that you avoid stock out situations that could send your customers to the competition. Clearly define operating procedures dealing with inventory levels, reordering, logistics, storage, and warehousing.
Safety and Security — How will you handle shoplifters? Who is in charge of opening and closing the store? Do you have an emergency fire plan? Make sure measures are in place to ensure the safety and security of both your staff and your customers.
Once you have these standard operating procedures in place, print them out and distribute them to your staff so that everyone — at both locations — understands the expectations and can best deliver a consistent, streamlined, efficient experience.
Nurture Existing Vendor Relationships
If it ain’t broke, don’t fix it, and that relates to the relationships you have with your vendors. When logistically possible, use the same vendors in your second location. They know your business. You know how they operate. It just makes sense.
Plus, having an additional location increases your buying power. Now that you’re purchasing for multiple locations, that means you’re spending more money. If you’re spending more money, vendors are more likely to pay attention and be more responsive to your requests. Make sure you leverage your buying power to negotiate better deals with suppliers, including discounts and favorable contracts.
Implement Cloud-Based Solutions
This is one of the most important aspects of running multiple locations, as replacing your on-premises software and manual systems with cloud-based solutions will essentially let you run your businesses from anywhere you have an Internet connection.
All you have to do is log in, and you can perform various tasks like checking inventory, viewing customer data, or monitoring sales. Whether you’re in one store and want to check out the
analytics of the other location or you’re at home or on-the-go and want to check in on your business, cloud-based solutions make it possible.
In addition, it makes things easier for your staff, as most cloud-based solutions are built for multiple users with features that make collaboration possible. And since you’re not relying on one single device, your data is more safe and secure.
The Bottom Line
Taking on a second location is a big decision, but also an exciting step in growing and expanding your business. Be sure to schedule regular meetings with your managers from both locations to ensure that nothing is slipping through the cracks, and that all of your objectives and goals are being met.
You want your brand to shine through wherever you’re doing business. Retailers who do this well are able to connect more effectively with customers, which in turn, enhances the customer experience — and the retailer’s bottom line.