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BFS Capital Blog

Things to Consider Before Expanding Your Business to a New Location

March 2, 2015

Starting a business is tough. Maintaining a business is even tougher. When you want to expand, that’s an entirely different level. There are a lot of things to think about before expanding your business and opening a new location. Is it the right time? Can the company be duplicated without being diluted? Are sufficient funds available to finance business expansion?

These are a few things small business owners should consider before expansion.


Grow now and grow fast. That may be the mindset of many small business owners, but that doesn’t always amount to a successful company. Sometimes owners can get carried away with the idea of rapid development, but setting your business up for sustainable growth and knowing when and how fast a company should expand is key.

Determine which way you are trying to grow – up or out? And how fast are you trying to do it? Growing upward should be your first goal. Your business should be capturing the maximum business opportunities before even thinking about expanding outward. If you aren’t at 100 percent capacity with your fist location, you need to figure out what needs to be done in order to get there. Hitting and holding that 100 percent level of capacity means that your business is making the most money right now and experiencing customer volume at the greatest level.

Replicating Your Business

Let’s face the facts. One of the main reasons your business is successful is because of your customers. Without them, your business wouldn’t survive. It’s important to understand why people visit your store specifically and buy from you instead of others. Do they simply enjoy your products or services? Is it the factors of affordability or ease? Or is it the environment and atmosphere your store and employees provide?

Whatever it may be, you need to be able to pinpoint and replicate the aspects of your company and brand that keep your customers coming back. Establishing and retaining a brand across old and new locations is necessary to maintain customer loyalty. Whether manpower has to be split or doubled in order to open and run the new location, your first location should not be negatively affected.


Purchasing additional real estate might result in a nice tax deduction, depending on your financial situation. But finding the money to make the move in the first place is where the focus needs to be. Surplus revenue, small business loans, and merchant cash advances are several ways to fund business expansion. Using additional leftover capital is typically the best way to go when financing an expansion move because there are no obligations to pay yourself back. In any case, hopefully your decision to expand will take care of that for you. However, it’s not always the easiest to come up with a large lump sum of money upfront.

Remember to put the time and effort into your primary storefront first and then move on to the next one if and when you are ready. If your business isn’t reaching its maximum potential and maintaining consistent levels of success, the focus should not be on expansion. It’s important that the business itself is ready to be duplicated and replicated in order to reach maximum opportunities and benefits. Of course, financing is always something to consider when making any business decision, but it’s a matter of figuring out the best funding option for you. Expanding your business and opening a new location is something that needs to be thought through carefully.