Business expansion strategy: How to grow your business

If you’re wondering how to grow your business, opening a second business location can open up plenty of opportunities. It can help your business and brand increase your customer base and strengthen your community or online presence. But it requires logistical planning and the right protection for your success.

In this guide, we’ll explore best practices for growing your small business and how to successfully open and manage a second location.

Jump ahead to learn more about:

• Why is small business growth important?
• Multilocation strategy to expand your business
• Insurance for opening a second business location
• 5 tips for business expansion strategy
• What are the disadvantages of an expansion strategy?
• How NEXT helps small business owners grow and expand

Why is small business growth important?

The U.S. has 33.2 million small businesses, according to the U.S. Chamber of Commerce. To keep your business thriving, growth is essential. Expansion plans for your business can help you reach new customers, increase sales and make your brand more well-known.

But business growth isn’t just about increasing profits. It’s about long-term sustainability and making sure your company can continue to do business and adapt to changing conditions.

Multilocation strategy to expand your business

There are a few paths for scaling your company, including starting a new business, franchising or buying and existing business. It’s a big decision, and each approach has unique advantages to help grow your business.

If you choose multilocation expansion, you extend your reach, create a way to try new products and partnerships, and you can replicate the success of your current location in a new area. After all, you’re building on a solid foundation — your own expertise and a proven business model.

Insurance for opening a second business location

Approximately two million U.S. small businesses are multilocation, according to the U.S. Census Bureau — meaning that business is going so well for so many small business owners that opening a second location for your business is possible. No matter how many places you have, the right insurance protects your assets, employees, and customers.

Workers’ Compensation insurance for multilocation businesses

Retail stores, restaurant owners, cleaning services and gyms are some of the most common types of companies to extend to multiple locations in the same state. Workers’ compensation insurance can help protect your employees across all of your sites in the event of a work-related illness or injury.

For example:

• If you have three restaurant locations all in the same state, multi-location coverage may be available. 
• If your business is, say, in New York, but some of your workers head out to a cleaning job in New Jersey, multi-location coverage may help.
• If your workers are remote but in the same state, you may want insurance for business expansion.

General Liability insurance for businesses with multiple locations

For entrepreneurs with multiple locations, general liability coverage is a must-have to protect against risks. It covers your business if it’s responsible for damaging a customer’s property or if a non-employee gets injured at any location.

If your team travels between locations, such as for construction, cleaning, or other on-site services, make sure your liability policy extends to wherever they work.

5 tips for business expansion strategy

Opening a second location is a big step. A business plan can go a long way. Here are some tips on how to grow your small business:

1. Know your market: Check out local demand, customer preferences and the competition. Make sure there are enough customers to support your new location.
2. Create an expansion plan: Refresh your marketing strategy to include details about your new establishment. 
3. Review your finances: Take a close look at your numbers and the bottom line when considering how to expand your small business. Compare the estimated costs of opening a new location with your projected revenue to know if you’re financially ready.
4. Maintain consistency: Keep the customer experience the same across all sites. From product quality to customer service and atmosphere, maintain the same high standards that made your first location a success.
5. Hire and train smart: Build a team you can trust. Hire the right people and give them the training they need to deliver consistently across your locations.

What are the disadvantages of an expansion strategy?

Expanding business can be an exciting move, but you need to go in with eyes wide open. Here are a few challenges that can pop up along the way:

1. Higher costs: Scaling means taking on new expenses like rent, utilities, payroll and inventory for the new site. Plan your finances and look to lenders to help cover these costs.
2. Coordinating across locations: Managing multiple sites can be a juggling act. Good communication and solid systems can help align everything, from inventory to customer service.
3. More demands on your time: With a second location, you’ll have more on your plate. Dedicate extra time to oversee the new facility without losing focus on your original business.

New markets: A new location means entering a new market. Local demand and the customers you serve can be different, and you might face existing competition that you didn’t have in your flagship. Thorough research into local resources can help you make better choices for success.

How NEXT helps small business owners grow and expand

NEXT makes it easy for small business owners to expand with confidence. We can give you a real quote and get you a policy in about 10 minutes. Just answer a few simple questions, see your price, and buy your coverage — all 100% online.

Prefer a little extra help? Our agents are here for you. With NEXT, you can get the flexibility to get the insurance you need on your own terms whenever it fits your schedule.

Start a free quote with NEXT today.