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If your business is operating at full capacity, in other Opening another location doesn’t necessarily mean that
words, you couldn’t handle more customers if you wanted to, you need to develop the same business concept. While your
then opening another location may be a wise thing to consider. first location might be a sit-down café, your second could be
If you do open a second store, you’ll want to be sure to pick a coffee cart or kiosk located in a shopping mall or on a college
dynamic location. You’ll also want to make sure that your second campus, or perhaps a small drive-thru located on a busy street
location isn’t too close to your first. You won’t want to cannibalize or highway. Certainly these smaller operations will cost less
sales from your first store, in essence reducing both sales and to establish, and be easier to manage. The type of concept you
profitability. Some other considerations in opening another choose should be based upon the opportunities that exist in
location are, the reduction in overall profitability that you are your market, and what would be most appropriate.
likely to experience for 6 months to a year, and how you will Business expansion doesn’t always require opening
manage two stores.
another location. Enlarging your current store, or adding
I think it goes without saying, that if you divide your time additional menu items or features is another way in which you
between the management of two stores, neither will run as well can grow.
as if you could be there full time. remember, business is like an
automobile, it will only run by itself downhill! To be successful, For example, if you lack customer seating, and this is limit-
you’ll need a full time management presence in both of your ing your sales, then if an opportunity to expand your business
stores. This means you will need to hire a qualified manager, or into an adjacent space becomes available, you should probably
develop a sharp and trustworthy employee to become a manager. consider it. Of course, you will want to project how much
regardless to whether you hire or develop your manager, they’ll additional revenue and expense you might produce to determine
need to spend significant time “shadowing” you, to gain an if this makes sense.
understanding of your management style, your values and A final way in which you can expand your business is by
priorities, and the tasks you preform. adding additional menu items or business features. This is the
onearea of business expansion that might make sense, and be
A word of caution, there are three things you should never
allow your manager to do: write checks, withdraw money from acceptable, even for a business that’s losing money. If there is
your bank account, and enter into legally binding contracts. You a void in your market for ice cream, pizza, panini, or beer &
should be the only one who is entrusted with these tasks! wine, then adding one or more of these items to your coffee
bar, will certainly increase sales and profitability. Or, maybe it’s
Normally, when an owner opens a second location, they possible for you to add a drive-up service window to your
will be the one who manages it, and the new manager will take operation. While these types of ideas will require some addi-
over the existing store. This only makes sense because you (the tional investment to initially establish, you will still be operating
owner) have already gone through the process of opening a store out of your existing space, so you may only incur some addi-
and building it to profitability. And, it will be far easier for your tional labor expense. Like with any important business decision,
new manager to take over the established profitable location. be sure to “push the numbers” first to make sure it will make
However, when a new manager takes over an existing location, good business sense!
it may take a while for them to get into a comfortable routine and
produce the same level of profitability that you were achieving.
Also, the new store that you are now managing will likely run
in the “red” for a period of time while you build sales and get
expenses under control. This means that the income you have Ed Arvidson is President of E&C Consulting
become accustomed to might be reduced, or evaporate entirely, www.coffeebizconsultant.com and he is the creator of the
until you and your new manager get thing under control. This Specialty Coffee Industry’s premier online coffee business school
isn’t unusual, but you’ll need to be prepared both mentally and www.coffeebusinessschool.com
financially for this possible temporary loss of income.

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