How to manage growth while expanding to multiple locations
Planning for a business expansion to a new location can be as exciting as it is challenging. You want to achieve profitable growth without causing unwanted disruptions to your current operations. But operating seamlessly out of multiple locations can be more difficult than it may seem, and to get it right, there are a lot of things you need to factor into your decision-making. To help your company grow and thrive, here are some of the most important things businesses with multiple locations need to consider.
Managing businesses with multiple locations: 7 essential elements
Standard operating procedures
To replicate the success that led to your multi-entity business, you need to make sure all processes, procedures and policies are standardized from one location to the next. This includes everything from workplace conduct policies to the financial processes your accounting teams use to reconcile accounts. Standardizing procedures ensures operational continuity and reduces inefficiencies or redundancies. By working to ensure that all business processes fit within your established model and operations, you can make your new location a seamless addition to your enterprise.
Multi-entity accounting software
Businesses expanding to new locations often find themselves with a new legal entity, either because the expansion is actually an acquisition or because it simply makes the most sense to structure your organization that way.
This creates challenges when it comes to managing inter-company transactions. Consider the costs of supplies you store in a central warehouse but allocate to each location. If each one of your 10 locations has its own accounting spreadsheet, you would need to log in and out of 10 different databases to properly account for that expense. This also makes it time-consuming to compile consolidated financial reports. That's why it’s critical you have multi-entity accounting software to manage your business growth.
Multi-company accounting software makes it easy to manage transactions and reporting for many different locations or entities in a single database. You can maintain a list of shared vendors and customers, and you can easily distribute accounts payable and accounts receivable across all your locations.
Lease accounting standards
If you will be leasing property for your new locations, it’s important to know that the lease accounting standard is changing. Under the new standard, you will now have to recognize nearly all leases on your balance sheet. Make sure to factor this change into your financials as necessary to stay compliant and avoid any nasty surprises at the end of the year.
To make your new location a successful addition to your business, you need to look beyond the spreadsheets and focus on the human element of your company. A new location either means new employees or a new work environment for current employees, or most likely, both.
New personnel always bring challenges in terms of onboarding and training, but you also need to consider your existing employees as well. A new location can bring stress and lifestyle changes for your employees and their families, and while some may welcome the change, others may be less enthusiastic. Take time to check in with any transferring employees and give them space to express themselves. By taking employee feedback seriously and making your workers feel heard, you will be more likely to achieve a smooth transition.
Every new location you add to your enterprise adds another layer of complexity when it comes to inventory management. Whether you’re adding new office space and just need to make sure the printers have enough paper, or you’re building a new warehouse and changing the way you store inventory altogether, you need to understand how the new location will impact your supply chain and overall logistics. If you’re not doing so already, consider optimizing your inventory management with specialized software to make tracking and managing inventory easier across your enterprise. Ideally, your inventory management software will integrate seamlessly with your other financial systems to give you the complete visibility you need to ensure profitable inventory management.
Search engine optimization
If your new location is a warehouse or manufacturing facility, the only people who need the address may be your employees and delivery drivers. But if you’re opening a new retail outlet, office space or other location where you may interact with customers or partners, you need to make sure they can find you. Before you open the doors on your new location, make sure to update your profile using Google My Business to keep customers engaged.
You’ll also have to decide how to display multiple locations on your website, using a map tool, a list of locations or some other feature so visitors can easily find the information they need. Depending on your industry, a new location could have other implications on digital experiences for your customers and prospects. So be sure to reassess all of your online properties to make sure you factor the new location into your overall brand experience.
Building a success multi-company launch
Expanding to a new location is an achievement that deserves to be celebrated. But that celebration will be short-lived if you don’t take time to consider and plan for the added operational complexity the new location will bring to your business. By focusing on financial performance and driving efficiency without ignoring the human side of things, you can sustain profitable long-term growth and achieve strong financial results for your business.
Want to increase operational efficiency at every location you control? Contact Gravity today and schedule your online demo to see how our powerful multi-company accounting software can help optimize multiple areas of your business.
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