We’ve talked before on this blog about the general impression that brick-and-mortar retail is dying a slow death and why that simply isn’t true.
Last month on the blog, we talked about capital planning that focuses on improving the stores and locations already in your portfolio to ensure they each fulfill their potential. If your capital plans include opening new stores as well, you want to ensure you are making decisions that maximize your returns.
Many businesses trying to grow the smart way recognize that capital planning involves an analysis of both short- and long-term needs and goals before they decide where their dollars are best spent. Regardless of how you plan your budget, your goal, of course, is to boost revenue. The question is: what capital expenditures are most likely to make that happen?
If your town is large enough to have an economic development council, that council is probably tasked with analyzing your market in order to attract businesses and retailers to the community. To do this effectively, one of the very first steps you should take is to define your town’s trade area.
If you’re expanding your retail or restaurant chain without any sort of plan in place, hit the pause button. It’s one thing to plan the opening of one new location, but it’s an entirely different endeavor to plan for five or 50 locations.
When your store or business experiences success, it’s a natural progression to start thinking about expanding into new areas and markets. As you make the decision to do so, remember: data is your friend. If you do solid research up front, you’ll be able to get a good idea of the traits of your very best customers, their needs and behaviors, and of course, helpful information about where to find more of them.
In the world of retail, it’s very common to see businesses that experience some success with one location make the (sometimes hasty) decision to add another (or several)—and for them to want to move quickly. Whether it’s a private company that has their sights set on growing and selling their business or a public company aiming to achieve growth goals, there are lots of reasons that companies want to grow.
If you’re a franchise organization, you know well how important it is to understand the markets into which you are expanding so you can maximize your potential and increase sales. Too often, franchise concepts come to us when they have 20 franchised locations when it would have been better to implement a consistent strategy from the start. While the shotgun approach to franchise expansion might not cause problems for a while, developing a territory plan before you sell more franchises will ensure that you don’t limit your overall capacity for growth. In other words, taking a smart approach to franchise development will allow you to sell more successful franchises in the long run.