By Charles J. Bonfiglio
In the automotive industry, we all get used to working hard and keeping long hours. When you first open a business, those investments of time and effort are often necessary.
As your business matures, however, constantly putting in overtime may mean it’s time to examine your operations. Consistently working long hours could be a sign of inefficiencies or staffing shortages.
On the other hand, it may mean that you’re enjoying great success and it’s time to seriously consider expanding.
Growing your business by opening a second location is a proven way to scale your shop. If the timing is right and you execute a thoughtful strategy, you can see a multiplying effect in terms of productivity, revenue, customer satisfaction and profitability.
And you may even find that you finally have more time and energy to enjoy those rewards.
How can you know when it’s time to open a new location? There’s no simple formula. However, here are some signs that may signal your business is ready to expand.
- HEAVY DEMAND
When customers are regularly waiting for products or services because your staff can’t keep up with demand, a second location can enhance their experience—and ensure they’ll keep coming back instead of looking for another business to meet their needs.
A new store expands your physical space and staff, so you have more capacity to deliver excellent service efficiently.
Sharing some inventory, equipment and staff between the two locations allows you to double capacity without doubling your expenses. That increases your profitability rate.
You’re also providing a better experience and greater value for customers, building loyalty that leads to repeat business and referrals.
- POSITIVE INDUSTRY TRENDS
When an industry is on an upward trajectory, like the automotive aftermarket sector, expanding your business in anticipation of rising demand may be a winning strategy.
Not only will you get ahead of your competitors and discourage new businesses entering your market, but you also have an opportunity to streamline your company’s growth.
Keeping yourself connected to industry trends can equip you with valuable knowledge that can inform decisions about inventory, new services and products, staffing and, ultimately, when it’s the right time to grow.
- UNDERSERVED MARKETS
If customers outside your immediate service area come to your store repeatedly, that’s a good sign. It either means your brand is worth the extra distance, or there’s an untapped market nearby.
Either way, you can be confident that a built-in supply of new customers is accessible with a strategically chosen second location.
- METRICS
If you’re meeting goals across meaningful metrics—from leads, customer and employee retention, productivity and revenue—it’s time to start thinking about how to invest back into the business.
Opening a second location isn’t the only option. You could also consider adding new services or product lines to attract new business or hiring more team members to enhance customer experience.
If the numbers say it’s time to grow, don’t ignore the message.
CAREFUL CONSIDERATION
Expanding your business at the right time isn’t just about taking advantage of new opportunities. Failing to expand or waiting too long to act can have serious negative consequences.
If you can’t meet consumer demand for your products and services, customers may take their business elsewhere. Staying small while competitors grow could reduce market share and profitability.
Leaving money on the table is one thing. Failing to respond when the competition starts picking it up is another.
Charles Bonfiglio is president and CEO of Tint World, a provider of automotive, residential, commercial, and marine window tinting and security film services. With Automotive Styling Centers in the U.S. and abroad, each franchise location houses approximately 20 profit centers, ranging from in-store accessory installations to offsite sales and installation.
