How to Avoid the Perils of Small Business Expansion

By Rob Sabo | Posted August 23, 2012

You've worked hard to grow your market share and to increase your customer base and, as a result, you're planning to open a second, third and perhaps even a fourth location. It's a solid idea, and a great way to generate revenue from several sites at once.

But expanding your small business poses a number of problems you never face (let alone think about) when managing a single locale. Not only do you need more resources, but you also need a whole new set of processes to keep your fleet together and moving forward.

Before you sign leases, hire employees and order equipment, get the skinny on the four major challenges you could encounter when launching a new location. And, most importantly, learn some seriously savvy ways to overcome them.

Small Business Expansion: When More Means Less

Sure "less is more" at times, but when it comes to small business, the opposite can be true, as well. In these four cases, more storefronts, employees and resources can actually mean less for you and your business:


1.   LESS oversight: With 10 employees, it's easy to see how your employees treat customers and each other. With 50 employees, it's a taller task.

2.   LESS direct communication: It's one thing to walk across the hall to talk to a manager, but another to drive across town for a face-to-face. Instant communication typically yields better results.

3.   LESS cohesion: It's difficult to team-build across miles, or through electronic or telephone communication.

4.   LESS time: Working through tough assignments takes more time when you're not in the same place as key team members.

3 Simple Solutions

When managing more than one place of business, you may have less visibility and direct control over day-to-day operations, but that doesn't mean you're doomed. Three simple solutions can keep you informed, your employees productive and your business thriving:

1.   Hire the right help: Each location should have a manager who understands the scope of his or her operation, as well as how the location fits into the overall business. Managers who can "see the bigger picture" could be your biggest assets to collective stability.

2.   Clear reporting: Establish crystal-clear lines of reporting from employees to managers to you, to eliminate ambiguous expectations. Some workers are naturally self-motivated, while others slack off without oversight. Having a strong reporting system keeps you in-the-know on each location's personnel and performance.

3.   Shared vision: Strong businesses have a shared and well-communicated goal, whether it's a sales target or an internal benchmark such as zero customer complaints. Give everyone something to strive for or rally around.

Overseeing multiple offices, in the same town or across time zones, doesn't have to be a burden. Avoid potential problems through careful hiring, diligent oversight and constant communication with managers and other pivotal employees. Putting these pieces in place allows you to focus on business strategies and growth, not on daily minutia.

Rob Sabo, a longtime business reporter and freelance writer, lives in Reno, Nevada.

Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!

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