Ep. 185 When Are You Ready to Open a Second Retail Store Location?

I can’t tell you how often I’ve seen a shopkeeper open a second retail store location and want to tell them, “Wait, don’t do that quite yet!” I’ve also seen many store owners go on to close their second retail store location later on. 

Eight Things to Consider Before Opening a Second Retail Store Location

This doesn’t mean that second, third, or fourth locations don’t work out for ALL retailers. They absolutely can work! 

But before opening a second retail store location, consider the following eight things. 

#1. Finances

Understanding your finances for your first retail store location is critical for the success of your original store and future locations. 

Do you know your numbers and financials for your first retail store location? Do you have a bookkeeping system or a solid accountant to guide you? 

If you’re constantly behind on bookkeeping, don’t have a sound system for obtaining financial reports, or frequently avoid your numbers, don’t open a second retail store location. You’re not ready, and your financial problems will only compound.

#2. Cash & Profit

In addition to understanding your finances, your first store should be cash flow positive and consistently profitable before considering opening a second location. 

If your first store isn’t there yet, do you feel confident it will be cash flow positive and profitable soon? There are store owners who have debt from opening their first store but are confidently on a path to success—and those store owners can probably open a second retail store location. I just want you to truly KNOW what your trajectory looks like. 

#3. Your Team

You can’t open another store without a solid team or hiring process! 

Something else to consider is that if you dislike managing people, a second location will compound that dislike as you’ll have more people to oversee. If you’re still embracing and learning to be a good leader, you might want to wait a bit before opening a second retail store location. 

#4. Management

You can’t be in two places at once! Can you trust someone on your team to manage your second location? Or are you confident in hiring someone to do that? 

You also need to be willing to let go of controlling every detail about your store. Trusting someone to manage your second location requires you to step up and lead with the big picture in mind rather than focusing on the day-to-day minutia. 

#5. Systems

Having your systems and processes documented will make starting and managing your second retail store location easier. A retail store operations manual will make training easier, help everything go more smoothly, and create consistency across both locations. 

Check out episodes 180, 181, 182, and 183 for more information on creating a comprehensive operations manual for your retail store!

#6. Demand

Opening a second store location can’t just be because you want to—your customers have to want it, too. 

Do you notice customers traveling from another area to shop with you? Are you constantly dealing with long lines? Do you get comments on your social media posts saying, “I wish you would open here!”

If not, opening a second location might not be a good idea yet.

#7. Market Research

Knowing your customers, your community, and other stores in the area is an essential piece of the retail puzzle. 

Do you know where your current customer base is from? Will the new location draw from those customers or attract a new customer base? Is there a gap in the market in the new community/area where you’re looking to open?

#8. Mindset

Of course, I can’t leave this one off the list! 

You might think I’m going to talk about having a strong mindset, as I often do. HOWEVER, in this case, I’m talking about your ego. 

Far too often, indie retailers let their egos decide to open a second store location for them. They fear a competitor will open in an area they want to open, or their ego wants to compete with other growing retailers (can we say FOMO?!). 

But be careful with this—in most cases, the store owner isn’t ready to grow! They haven’t considered the seven other things I mentioned above. They’re deciding to feed their ego, not because they or their business are genuinely ready for this kind of expansion. 

Are YOU Ready to Open a Second Retail Store Location?

While the eight items above aren’t a comprehensive list, they are a good starting point for thinking about opening a second retail location. This a big decision for your business that requires a lot of energy, effort, and investment!

I’m all for doing scary things and taking a leap of faith, but I also think it’s important to do so WISELY. 

I would love to hear from you if you opened and closed a second location. What were the lessons you learned? Did I touch on any of the reasons why maybe you weren’t quite ready to open that second retail store location? Send me a DM on Instagram!

Resources

• Shopkeeper Shoutouts: Mallory, Jen of Feather and Bloom, and Jen of Rustic Rehabs
• Ep. 180: Eight Benefits of a Retail Store Operations Manual
• Ep. 181: Five Brick and Mortar Store Systems Every Shop Owner Should Document
• Ep. 182: Get Started With an Operations Manual Table of Contents [FREE DOWNLOAD]
• Ep. 183: Optimize Your Operations Group Program (Launch Day!)
• Free resource: 100+ Quick & Easy Social Media Ideas for Retailers
• Join Master Shopkeepers, the only territory-protected retail training mastermind for indie brick and mortar store owners!

Timestamps

• [03:58] Eight Things to Consider Before Opening a Second Retail Store Location
• [11:47] Are YOU Ready to Open a Second Retail Store Location?