4 questions to consider before opening a second business location

Expanding your business into multiple locations is certainly an exciting prospect for any owner. Whether the expansion is prompted by demand, financial success or necessity, having two or more locations is typically a sign that your company is on the right track. However, adding a location is not a decision to be made lightly.

A recent Forbes article has some good tips for deciding when to open a second location as a business owner. In this blog post, however, we will focus on the real estate elements of operating a second (or subsequent) location. Before you decide to expand, consider these four questions.

  1. Where would you open the business? Before you decide to open another location, consider where you might open. Do you have clients in the area? Is it safe? Is it zoned for your purposes? How much is real estate in that area?
  2. How much will it cost to operate a second location? Operating a second location means paying for two properties, paying two sets of utilities and hiring additional employees. Can you cover these expenses?
  3. Is construction going to be involved? If you plan to build or renovate, then you will want to be prepared with a thorough construction contract. By establishing and enforcing deadlines and budgets in these contracts, you can protect yourself from losing money before you even open your doors.
  4. Are there different laws with which you must comply? This can be particularly critical to consider if you open a location in another state. State laws vary with regard to employment laws, taxes and zoning requirements, so it is important to understand the legal elements of opening a location in another jurisdiction.

These are just a few of the questions related to commercial real estate that you would be wise to think about when you are considering expanding your business into multiple locations. You can also discuss them with your attorney to examine any potential disputes or complications that might aris e in an effort to avoid them.