Tips to Expansion Your Retail Business with Multiple Stores

The opportunity to grow your retail business is exciting and it can be tempting to throw yourself into opening additional stores without much planning or strategy. After all, more stores equal more revenue, right? Well, yes, if planned and implemented well, opening multiple stores can boost revenue and profit. It can also bring community benefits by creating additional jobs. However, before you start eyeing up new premises, there are a number of questions that you should ask yourself.

Here is our guide to what you need to consider before opening additional stores for your retail business.

How will you pay for your new stores?

Setting up new stores can be expensive, so before you get carried away you need to work out what expenses you will incur (think rent, utilities, staff salaries, equipment hire, taxes etc) and how you are going to cover them.

Unless you are planning on opening a much bigger or smaller retail outlet, then you should have a pretty good idea of your business overheads from your existing store. Ergo, this part should be the easy bit.

However figuring out how to pay for your business expansion is undoubtedly the tricky bit. However we have managed to collate a few options for you.

1. Use revenue from your original/existing stores.

This is the ideal solution, but it only works effectively if your business is in the black and you can afford to take your business profits and invest them into your new store/s. If you can afford to do this it could save you paying out on loan interest fees or from giving away company equity to an interested investor.

However you still need to ensure that you don’t direct too much away from your established stores, as this could affect its ability to remain successful.

2. Get a business loan.

When it comes to helping business growth, there are hundreds of companies that will offer to loan you money. It can be easy to get swept up in the offer without factoring in the viability of paying the money back. If you decide to go down the route of a business loan you need to ensure that you can guarantee being able to afford the repayments as failed payments mean expensive charges! You should also shop around to try and secure the lowest rate of interest possible.

3. Finance the expansion yourself

If you are lucky enough to have substantial personal savings or assets then you may wish to you use these to fund the expansion of your business.

4. Get an investor

If you are prepared and willing to give away a small share of your business then you may be able to find someone who is willing to invest some of the capital you need for the expansion. You will need to get a solicitor to carefully draw up an agreeable trade.

Will you have to factor in changes in the law or regulations for your new store?

If your new store is in a new geographical area then you may find that the legal requirements for running a business there are different to your established store. This is especially likely to be the case if your new store is in a different state.

Ideally you should employ a professional realtor, accountant or attorney to look over your business and the local laws to ensure that you aren’t in breach of them, which could be costly.

The main areas you will want to ensure that you have covered include:

• Business license
• Sellers permit
• Health permit
• Certificate of occupancy
• Air & water pollution control permit
• Fire department permit

You may not require all of the above, but you should check with your professional which you need, including any that may not be included in this small list.

You should also ensure that you have a comprehensive knowledge of the laws around consumer and employee protection, including privacy, safety, trading hours, consumer protection, retail pricing, employee training, employment laws and advertising, marketing, labelling and packaging. Again these may not all apply to your store, but you should at least check as fines and sanctions could be applied against you and your home.

Do you have the management structures in place to ensure ALL of your stores are successful?

As soon as you open up a secondary store your attention becomes split and the more stores you have the more you have to oversee. Unless you can figure out how to be in more than one place at a time (and if you can please share with us how), the next best solution is to have a great management and staffing structure in place at each of your stores.

There are a number of ways of doing this.

Set up a strong management team of individuals that are not only great at their job, but have passion, drive and embody the values of your brand.

Give great incentives. Whether it be great salaries, additional holiday days or other perks, you need to offer something that attracts and retains great employees to your business.

Create a comprehensive and consistent training plan to ensure that all employees receive exactly the same training that is effective regardless of what store they are placed into.

Create Standard Operating Procedures (SOPs) that any member of staff can turn to to clarify a process or policy.

How will you balance tailoring your new store to its local clientele whilst keep it true to your brand?

As retailers you know the vital importance of having a brand that is consistent across all platforms of sale. However in order to be successful you also need to appeal to your local clientele and what you need to do to achieve this may vary from store to store.

Maintaining a consistent brand image whilst tailoring your service to include local tastes can be a difficult balancing act, but it isn’t impossible. Here are out top tips…

Brand Consistency

Brand Training. It doesn’t have to be a long or intensive course, but just a few hours spent with your staff explaining your brand vision, values and the direction you want your business to head in can be invaluable. Not only will it help your staff to do their jobs better, but they can also project what they have learnt in any of their interactions with customers, for example in store, online or in an email. You can also follow up any training with a handbook or corporate identity document.

Solid SOPs. We cannot stress the importance of SOP’s to maintain brand consistency. Make sure that every single one of your actions is written in an SOP to help you stay organised.

Consistent Design. If you think about all of the big chains of stores, they almost always have the same design and layout inside. This provide a better quality and more efficient shopping experience, which as we know keeps the customer coming back for more.

Tailoring to Local Clientele

By ensuring that your stores are relevant and useful you are immediately making customers feel valued and important. This equals great customer service and as we know, offering a personalized and special service keeps customers coming back for more!

Find out from your new customers if there is a certain preferred brand or supplier of products for your store. If you can source in from local businesses then this will reflect well on you and help support your community.

You can also create bespoke marketing approaches that adhere to your brand guidelines but carry a tag line, message or visual that targets your local shoppers. Brainstorm with your creative team to come up with some innovative ways to reach out to your local market.

Do you have the technology in place to manage multiple stores?

Technology is crucial to successfully run a thriving business with lots of staff, large inventories and sales information all being able to be calculated and stored online.

Thanks to the rapid progression of technology for retail it is now possible to centralize procedures, so that processes that are happening in multiple stores are able to be controlled in just once place.

Say ‘Hello’ to a cloud-based iPad POS system where all of your company data can be stored safely online. No servers are required, saving you valuable space, plus your information can be downloaded from the cloud at just the touch of a button.

As you can imagine this is invaluable for muti-store retail businesses as it lets you retain total control from whatever location you are in. It also synchs in real time meaning that you have up to the minute data meaning you can effectively advise on stock levels etc.

Here at Hike, we are pleased to be able to offer cloud-based POS software that is a comprehensive and low-cost solution for retail businesses looking to start, maintain or build upon their brand. Click HERE to find out about our free 30-day no obligation no credit card trial!

If you have the opportunity to expand your business, we hope that this blog has given you insight into the decisions that you may need to make before jumping in with both feet. Good luck!