If you’re considering opening a second location, then congratulations! Even to be thinking about it means that you must have successfully launched and run your own workshop, built a steady customer base, and managed your finances well.
To repeat that success and build on all these good things, you need to be sure your business is ready to add a second location. Start by asking yourself the following questions:
- Has your existing workshop become too small to handle customers?
- Is there a market outside of your current location?
- Do you have enough money to finance a new workshop?
- Can your lifestyle cope with you putting in the necessary extra hours?
- Will the second workshop location increase your overall revenue and profitability?
If the answer to most of those questions is “yes”, then this could be the right time to open a second workshop. It will demand time and capital but if you plan carefully it can be extremely rewarding.
Choose the right location
The fact that your workshop is flourishing now means you chose a good location first time round. Think back to the decisions you made and apply them again. List the potential locations, then conduct a little simple market research to see which of those locations has the greatest chances of success. This market research can include looking at the demographics, checking out the workshop competition in the area and talking to local people to ask how they feel the area is served and what, if anything, they would like to see more of.
Think about where your new customers will come from, for example, is there a nearby business park where office workers might have car problems and benefit from a garage they can use during their working day?
Another option may be to purchase an existing workshop business. Look to see if any workshops are for sale in the area you are wanting to expand into – this option may help you with initial equipment and set-up; it should also give you access to existing regular customers and potentially some existing mechanics that you can retain and have work for you.
Develop a marketing plan
Start by advertising the new location through social media, email marketing, and other communication channels. Plan a grand opening date, perhaps with discount offers and giveaways to attract attendance – promote this on social media too. Prepare an introductory offer for visitors in the first week or month; offers are likely to be shared on social media, which is why referral campaigns work well for businesses (read more in our Digital Marketing blogs, such as ‘How to use digital and social media to create a simple referral programme’).
Create a business plan
Where appropriate, model the plan for your new location on the one you made for your first.
However confident you are that you know the ropes, you should always write out a business plan. This will help in a number of ways, not least because lenders and investors will want to see it; if it is well thought out it will encourage them to support you. The plan should explain why you believe the workshop meets consumer needs (referring to your market analysis), a list of products and services that you will offer, and a marketing plan. It should also include funding needs and financial projections for the new workshop. Be realistic – for example, if the new workshop only permits two ramps, this sets a limit on your possible daily earnings.
Set up accounting
As your business grows larger across the two sites, mistakes may creep in. To avoid this and to stay organised, separate your income and expenses between your different business locations. This will also enable you to clearly monitor the success of both sites, see how well each performs, and how much investment each one demands.
Secure the capital
As a successful workshop owner you know that it takes money to make money. The same goes for your second location, although this time you will have more flexibility financially because you already have a steady stream of revenue from your first location.
Make a list of all expenses and double-check that you’ve included hidden costs, such as taxes and permits. Consider start-up expenses plus your current location’s costs. If you feel that revenue alone will not cover the second location’s expenses consider securing outside capital via a small business loan (this is where a good business plan comes in), crowdfunding, or borrowing from friends and family.
It’s time to delegate (see the Business Success blog ‘7 leadership qualities that help make a successful workshop’). However experienced and motivated you are, you won't be an effective workshop leader if you try to be in two places at the same time.
You may need to consider hiring a manager that shares your values and who will keep an eye on day-to-day operations at the new site. You will certainly need to hire a workshop team with the experience and attitude you need to make the second workshop a success.
So, do you still feel it’s time to open a second workshop? It can be an exciting and very profitable time for you, and as long as you’ve thought through the kind of issues above, there’s no reason why a second workshop shouldn’t be a great success. Good luck!
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