Expanding to a Second Store? 10 Tips for Choosing the Ideal Location

Expanding your business can be exciting and a real show of success. However, there are many factors to consider when deciding on a second location for your brick-and-mortar store.

To help business owners in their search for the perfect spot, 10 Young Entrepreneur Council (YEC) members weighed in on the following question:

“When you’re finally ready to expand your brick-and-mortar store to a second location, what’s one factor you should keep in mind as you’re looking for the perfect spot? Why?”

choosing the ideal location for your business

Here’s what YEC community members had to say.

1. Consider the Comfort of Those Who Will Work There

“Everyone knows the importance of location from a customer perspective, and you should make sure that it’s a good match (foot traffic, demographics, competition, price per square foot). If it’s your second location, you’re probably not going to be there daily, so think about ways to make it the perfect spot for the people you depend on to make it successful and save you the stress of being there more than planned.” ~ Henry Glucroft, Henry’s Wine & Spirit

2. Search for Businesses for Sale in Your Industry

“Search to see if there are any businesses for sale in your target area in similar industries. These are called ‘second-generation’ spaces, and we see them sold and flipped into new concepts most often in the restaurant industry, but they are also available in others. It is often much less expensive to acquire one than to build from scratch.” ~ Jessica Fialkovich, Exit Factor

3. Verify Area Demographics Match the Customer Profile

“We’re big on branding, so we look to place locations in high-traffic areas to generate brand exposure. However, we want to ensure those impressions are within our target client, so we also verify the demographics of the area match our customer profile. Think about what else is important to your business. Are you a service business? Then you’ll want to be close to the highway to reach your clients.” ~ Nick Friedman, College Hunks Hauling Junk & Moving

4. Diversify Your Store Locations

“One factor to keep in mind when looking for a second brick-and-mortar store location is to diversify your locations. This means choosing a location that is different from your first store in some way. This could be a different city or town, a different type of neighborhood or even a different type of retail environment. This is because you want to hedge your bets against potential risks.” ~ Sujay Pawar, CartFlows

5. Choose an Accessible Location

“Before opening a physical store, always make sure that you check its access routes. The more routes it has, the better. In other words, it’s always a good idea to have your store at the center of a location that customers can easily have access to.” ~ Josh Kohlbach, Wholesale Suite

6. Keep Local Regulations in Mind

“Be aware of the local regulations when looking for a second location. This may include zoning regulations, local ordinances, signage and advertising regulations and other area restrictions. This is especially practical when scouting for a retail location in a different city. Not doing so can cause legal problems or cause unnecessary hurdles when starting your new business location.” ~ Brian David Crane, Spread Great Ideas

7. Research the Supply and Demand

“One factor you should keep in mind when expanding your brick-and-mortar store is supply and demand. Research the customer inflow and compare it with the supply options available. If an area represents marginal customer inflow and there are many brick-and-mortar stores there already, it means that the supply exceeds the demand. So, it won’t be a favorable place to consider for expansion.” ~ Jared Atchison, WPForms

8. Evaluate Foot Traffic

“You must consider many elements when looking for a second business location: demographics, competitors, safety and infrastructure, among others. However, to ensure that the business will generate consistent revenue, the most important factor to evaluate is foot traffic. How many people in your target demographic work nearby or pass by the area every day? Crunch the numbers before you make a decision.” ~ Bryce Welker, Crush The GRE

9. Choose a Different Part of Town

“When expanding to a second location, you should keep in mind that the new spot should be in a different part of town. This will help to draw in new customers who may not have visited your original store. Also, you don’t want to cannibalize your own business. So, try to find a location that has enough distance and is still close to sources for your supplies and other needs.” ~ Syed Balkhi, WPBeginner

10. Understand the Needs and Buying Power of the Area

“While expanding your brick-and-mortar store to a second location, one important factor is consumer demographics representing the targeted region. It’s essential to explore the needs, preferences and buying power of consumers in the respective region. This will help you come up with an estimated figure for your revenue and enable you to deduce the feasibility of your decision.” ~ Stephanie Wells, Formidable Forms

Image: Envato Elements

The Young Entrepreneur Council The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.