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 you need to consider when expanding your business to multiple locations.
In order to replicate the success that led to your business growing in the first place, you need to make sure that 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 things in this way will help ensure operational continuity and avoid creating inefficiencies or redundancies within processes. 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.
Often, businesses expanding to new locations will also find themselves with a new legal entity, either because your expansion is actually an acquisition, or because it simply makes the most sense to structure your organization that way. If that describes your situation, it’s critical you have the multi-entity accounting capabilities you need to manage your newfound entity. Otherwise, you risk wasting valuable time trying to combine financial reports by hand, and overall, you won’t have the data visibility or financial control you need to ensure success in your new location. To avoid creating operational inefficiency from the very start, make sure you have accounting software with multi-entity capabilities in place before the doors open.
Lease accounting standards
Speaking of accounting capabilities, if you will be leasing property for your new location, 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.
The human element
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.
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.
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