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Expand to New Locations

Prepare for a new market

First, update your marketing plan with your new location in mind. Think about your target customer, sales plan, and competitive advantage. Add up any additional marketing and sales costs. Make sure your updated marketing plan is just as thorough as your initial plan.

Compare your business to the competition, learn about the local market, and get a sense of the advertising market.

Next, review your business finances. Build a forecast that projects estimated costs and estimated revenue for your new location. Take a close look at your balance sheet to make sure you can cover the costs of expanding. If you don’t have enough capital, you can try to get more funding.




Update marketing plan


Check finances

Legal steps to expand your business

Expanding your business to a new state, county, or city isn’t very different from opening a new business there. You’ll want to make sure you register your business with the right agencies and pay the appropriate taxes.

Know before you grow

John and Kelly planned, financed, and opened a second location for their auto repair shop.

John and Kelly’s auto repair shop has been very successful and they want to open a second location. They go through a process similar to opening their first business location.

They first evaluate the customer base and competition in nearby locations. They discover an area that has few auto repair shops, but many automobile owners. After researching the competition, John and Kelly are confident their business can be successful in this new location.

John and Kelly want to pay for the expansion themselves, but don’t have enough funds. As an established business, John and Kelly’s auto repair shop already has financial documents. They show these documents to lenders as proof that financing their business expansion would be a good investment.

Next, John and Kelly select the physical location for their auto repair shop – one in an area that’s zoned for business. They then register their new business location with the proper local and state agencies – just as they did with their first location.

John and Kelly have expanded their business to a second location where they can be successful.


There are two primary ways you could expand your business with franchising.

The first way is to buy an existing business or franchise. This option tends to cost more upfront, but can be less risky than trying to start from scratch.

The second way is to build your own franchise. Businesses that are good candidates for franchising have a few traits in common.

  • Product or service is superior and appeals to potential business owners
  • Concept and operations are easy to teach
  • Business is easy to duplicate in new markets

The federal government and many states have requirements that must be met in order for you to sell franchises, so you may want to hire an attorney. Once you've begun franchising, some states remain active in the relationship between you and your franchisees by monitoring territorial rights or limiting the transfer and renewal of your franchises.

Franchising has more costs than many other types of businesses. You’ll probably need to pay lawyers, accountants, and advertising staff. Don't forget about training the employees and building systems you'll need to run the franchise.


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