Tips for Expanding a Chain of Retail Stores

Written by Karen Bryan

If you’re the owner of a successful shop, you’ve probably thought about opening up another location and expanding your retail business with a chain of lucrative stores. Things may be going great at your current location, but facilitating the launch of additional locations could impact the cash flow of the original business if the founder doesn’t have access to adequate financing. The ideal approach to starting any commercial chain is to have each location pay for itself without investing a considerable sum of money out of pocket. With that said, here are a few tips to heed if you’re planning on tackling the challenge of multi-faceted entrepreneurship:

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    1. Obtaining the Necessary Financing

First and foremost, retail shop owners need to compile proof of revenue and maintain a decent personal credit score to ensure approval for small business loans. It would be best to opt for a loan that can be paid back in the short-term to avoid entering into a long-term debt commitment during the initial phase of the new store’s operation. You can visit merchantmoney.co.uk to learn more about short-term business loans and how they can be used to benefits companies in the retail sector. Founding the second store from scratch with no financial assistance is not a recommended course of action due to the potential risk of the store not performing well.

    1. Choosing Additional Locations Wisely

Once you have financing options lined up, the next step is to use a checklist to ensure you’re picking the right spot for the new shop in your chain. This is an incredibly paramount aspect to consider, as it will directly affect the purchase price of the facility and the potential traffic and popularity of the storefront. As usual in real estate, you’ll have to pay more for a better location, but a higher price doesn’t always equate to a better spot when it comes to choosing the location of a retail outlet. A great way to gauge commercial potential is to examine how busy nearby businesses are. Properties that are situated along major roads are almost always good choices, as are those based in plazas and malls.

    1. Preparing for the Opening Logistics

With financing and location settled, the final steps in opening your new store will be similar to those encountered during the process of opening your first shop, but depending on how long ago you started the primary business, there may be some significant changes in the fees, licensing requirements, and other technicalities involved. You might want to invest in marketing services to promote awareness about your new location’s grand opening, as paying back your financiers promptly will require a fast-growing revenue rather than the slow, organic approach that you might’ve taken with the first store.

    1. Stocking and Staffing a Secondary Store

In closing, another significant aspect to take into account when budgeting is how much it’s going to cost to fully stock and staff both stores on a monthly basis. Performing this calculation and allowing some extra room for error will ensure that you’re not overcommitting to a second location prematurely.