Hi
Can somebody give me some research for small businesses on whether it
is better to expand and improve an existing shop or to look at opening
another branch?  Obviously we can't do both at the smae time, so is it
safer financally to spend money on renovating and expanding an
existing shop floor or better to spend that money on opening a new
branch somewhere else in the hopes that it will generate the revenue
to then expand the main shop.
I need relevant case studies for retail stores or other pertinant information.

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Request for Question Clarification by easterangel-ga on 10 Mar 2004 19:20 PST

Hi!

It depends upon your concerns and goal. Expanding your store will be
good for customer service you will primarily be catering to the same
market while having another branch will be more of market expansion
since you will be serving new communities.

Thanks!

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Clarification of Question by rothschildid-ga on 11 Mar 2004 17:50 PST

Hi
I think along the lines of what probonopublico-ga said is what I am
looking for.  Is there evidence that shows that it is better to
protect what you have before expanding your borders.  Its kind of like
the board game risk.  Do you wait and buildup troups in your home
country and then go attack or do you try to occupy and hold as many
spaces at once?
Are then any examples of companies that have succeeded in either
option?  I would like to read up on releveant companies to try and see
what was the defining factors that helped them succeed with their
strategy.

The first priority is to protect what you've got: it's the best
investment you can make.

A second facility will only dilute your time and resources, so don't
do it until you have gone as far as you can possibly go with your
existing shop.

I agree with Easterangel: the "best" decision is highly subjective,
and depends on your own aspirations, and attitudes to risk.  I doubt
you will find any definitive data showing either is "better".  If you
ask people who opened a new branch and it worked, they will say: "Yes,
DO IT!".  If you ask people who did it, and it was a dismal failure,
they will say: "No, stick with what you've got".  So who is right?

I will say that those who have made it into BIG business over the
years didn't do so without taking risks.  Typically, successful
entrepreneurs are less risk-averse than most people.  They are NOT
content to live with what they've got - they have a propensity to
gamble.  Some of them have had several failed gambles, and had to
start again from scratch, before they hit on the scheme that "made
it".

But this might not be you.  If you just want to make a steady,
reliable living, with no ambitions to become the next Bill Gates (or
whoever), you might be happiest keeping away from risks, and just
protecting what you've got, as another poster recommended.

If you DO want to take the "riskier" option of opening the new branch,
how well have you done your research?  Do you have a location in mind?
 Are you confident your products will appeal to people in that type of
neighbourhood?  How do you know?  What's the competition like?  Are
there other, similar shops in the district?  How are they doing?  Will
the market bear one more?  These are all things to think about...

Hey, C'mon, as a Rothschild, you should be telling us.

It is rare to fully utilise staff in a small business. If your current
store had 7 people doing the work of 6.5, then two stores would
magnify the problem (14 people doing the work of 13), versus an
expanded store (13 people doing the work of 13).

This way of thinking works for most expenses. Advertising is better
value for multiple stores.

Conversely, Walmart and McDonalds didn't become behemoths by growing
bigger stores...