Make this Easter long weekend count for your small business
Opening up a new location is a goal for many small businesses. As exciting as it is, though, it’s important not to get carried away and make the leap before you’re ready. Instead, you should head to the drawing board and seriously consider what you’ll need to make sure your move is a success.
To help get you started, we’ve compiled a list of big ticket items to consider before signing the lease on a new location.
What are the benefits of opening a second business location?
Before we get into the considerations, let’s discuss the key benefits of setting up a shop in a new spot.
Attracting new customers
Reeling in new people who are buying what you’re selling is an obvious advantage of setting up a secondary business location. Not only can this generate more sales and increase brand recognition but it can also prevent your business from relying on a single client base for revenue.
Creating economies of scale
Another benefit of expanding your business is achieving greater economies of scale. A new store calls for more products, which means you’ll need to buy larger quantities from your suppliers. Typically, buying more from one supplier will allow you to leverage deals that are only available at a certain spend level, which should hopefully reduce the final costs of goods sold—leaving you a better return on investment and hopefully with extra cash to invest in other areas of your business.
Income stream protection
Entering a new market, or adding new products and services to your offering, means that if one part of your business is experiencing a lull, you can rely on other income streams to keep things ticking along.
Things to consider when expanding your business
There are certain things you’ll need to consider before opening up a new business location, to ensure you’ve got a strong foundation to build on.
Evaluating the market
Before you sign the lease on a new business location, it’s important to do your research to determine if your business has a good shot at success in the area. Some questions to ask yourself include:
- Is there a gap in the market we can fill?
- Are there competitors and how are they getting on?
- Would the main demographic be interested in our products/services?
- Are there any challenges that our primary location doesn’t have?
Choosing a location
Where you set up your new shop is almost as important as what you offer. Key location criteria should include easy access for customers and suppliers, plenty of room to operate comfortably, and not being inundated with competitors.
Building a budget
When considering expanding your business, you’ll need to ensure you have enough funds to get your new space up and running (and to keep it running). The best way to do this is by making a list of all projected expenses, such as rent, renovations, equipment, inventory, wages, and utility services; as well as any hidden costs such as taxes and permits.
If you don’t have enough funds to spare from your current revenue, you may need to take out a small business loan or get an investor to get you over the line.
Hiring extra staff
As the saying goes, you can’t be in two places at once. So even if you’re a hands-on small business owner, you’ll need to hire a manager and a team of staff to breathe life into your new business location. Have a think about the positions you’ll need to fill and what type of people and qualifications you’re after. It’s always wise to start the hiring process early and ensure everyone is trained before opening day, to avoid any hiccups.
When planning your business expansion, remember not to lose sight of your primary location and sacrifice its success for your secondary spot.
How Tyro can help you expand your business
Expanding your business is an exciting, but sometimes complicated, process. Thankfully, Tyro has a suite of products that can make the transition easier.
Tyro Business Loan
If you’ve got a Tyro Bank Account, you can access unsecured lending up to $350,000 (subject to eligibility criteria) to help cash flow or finance a new location. With flexibility to repay as you trade, you pay less on slower days and more when sales are strong (subject to minimum payments); so you can maintain confidence should you experience any slow periods as your second location gains traction
Tyro Business Loan
Tracking business performance across multiple locations has never been easier than with the Tyro App.
Ben Cleary-Corradini, co-founder of food phenomenon Gnocchi Gnocchi Brothers, says, “you can log in and see transactions on the go, anytime, even seeing how different locations are performing on a hour-by-hour basis. It provides really great data, historically, that we can then use to make better decisions on when peak times are”.
As well as offering fast, simple and secure payments Tyro EFTPOS simplifies the process of getting started at a new location.
Fletcher Kidd, owner of not one but eight Just Cuts salons across NSW’s Hunter region, didn’t hesitate to turn to Tyro when making the jump. “I immediately switched them over. It was a simple process, just contacting our account manager and all the equipment was shipped, ready for the changeover and ready to go.”
Expanding business is a milestone move for any small business owner, made easier with the support of Tyro’s business-friendly products. Know what you want to achieve, and what you’re getting into, and add the right support system and you’re in business!