Running Multiple Locations: What To Keep In Mind
Let’s start with the challenges…
- Dropping in on those locations to see how things are going
- Looking through receipts with a calculator in hand
- Meeting with managers
- Addressing escalated issues with staff, customers, and vendors
- Washing, rinsing, and repeating these, and more…
You’re also going to have to start developing a team. As the number of locations grow, the demands for hiring, supervising, developing, and managing are only going to grow, to say nothing of keeping a close eye on financials and product and ordering flow. This added human infrastructure comes at a higher cost.
Now, the benefits…
One of the intangible benefits of building that team to support you is that you are providing great incentives for your best staff to stay with you and step into those positions. No longer constrained by the ceiling of a single location where they may have maxed out financially and professionally in growth, these staff can help you run multiple units, which may be precisely the challenge they want and need.
The obvious economies of scale cost savings may have occurred to you, but you’ll also gain clout in negotiating for real estate. You may have created relationships with developers and property managers in town and as you prove the viability of your locations you may get better lease terms for new locations. With those multiple locations, you may attain one of the most coveted jewels of multiple-location franchising: local market dominance. As people see more and more of your locations all around town, they will not only sit up and take notice but may have a chance to try you out in their backyard instead of pigeonholing you into a particular part of the city.
What’s right for you?
Obviously, a multi-unit commitment requires more in the way of upfront cost and net worth. It’s also important to realize it’s a much longer-term play than a single unit, as the costs involved mean that it will take a while (and significantly higher cost) to realize all the benefits possible, whereas in a single store you can get to operating efficiencies and profitability much quicker, as it has your entire focus (hopefully!).
As Elevated Brands continues to grow The Gents Place, we will be looking for both single-unit and multi-unit strategic partners. We want to help you build your dreams, in alignment with our values.