More business from more locations. That is the goal of many contractors today.

Adding locations sounds like an easy way to significantly increase business revenue. Plus, if you can use some of the same administrative support for the new location(s), the overhead costs for each new location could be reduced, compared to the costs for the home office. How could you go wrong?

Actually, there are some pitfalls - as well as some definite benefits - that accompany adding branch locations. Let me share some of the potential headaches that I have experienced with new locations, so your decision to “branch out” can be made with thorough consideration of all the risks and benefits.

Communication

Don’t assume customers in the local area will immediately begin calling your new location. All calls should go through a call center, which is a main office function. There, calls can properly be routed and answered by the same experienced call takers who usually answer your business telephone lines.

Don’t worry about exchanges, numbers or concerns potential customers have for calling a local number. With the modern electronic resources available today, you can arrange all sorts of numbers, exchanges, toll-free or “local” phone numbers that customers can call. Why invent a new system and duplicate the efforts of an already proficient staff?

By centralizing communications, you will keep costs low and maintain the quality of the call-taking function, streamlining the opening of new locations. Operators will answer with your company name - just as professionally as they do every day - and they will be familiar with the needs of the dispatch department.

Dispatch

While you are implementing the telephone answering process, you can apply the same analysis to the dispatch function. Keep the dispatch department where it is and the new location will start operations with experienced people. Only the starting point for some of the trucks will change.

A centralized dispatch system is more efficient, and it permits a faster start-up for the new location. Software and computers can be adapted to include the new facility, along with the new technicians and support personnel, so you have another cost-saving opportunity.

Leasing Space

Although it may be tempting to “clone” a successful location, duplicating every aspect like a fast-food chain location might not be such a good idea. Since a portion of your facility space is allocated to call-taking, dispatch and other home office functions, you need not acquire as large a space as you currently operate. Identify only the critical functions of the branch location and get the space you need for those functions.

For example, you will want some warehouse space for restocking parts and equipment; it’s not practical to have trucks driving all over town for restocking. You’ll need some space for truck maintenance and fuel, too. Keeping trucks running smoothly at the new location is going to be more economical than driving them to a central location, unless you have a major maintenance and repair facility at your home office within a short drive.

Include some space for administrative functions; there is always some paperwork required to complete service calls and invoicing. However, the more “paperless” your operation, the less space and personnel you will need.

Computerized Administration

Service businesses today can operate almost exclusively on computers. Payroll, inventory control, customer records - all those can be maintained on computers. As much as possible, switch to a mostly computerized office before you open a branch location.

A direct deposit system set up with a local bank will simplify your payroll check tasks and provide a benefit to employees at the same time. Their checks are already in the bank, so they don’t have to stop at the home office - often accomplished with your service trucks. Now technicians can head to the next job instead of stopping at the bank.

Opening a new branch also may be the time to take a look at outsourcing some of the traditional administrative functions. Relying on experts could make opening the new branch even easier and more cost-efficient. Outsourcing takes you beyond a paperless office, and further minimizes the space and personnel you need.

For example, having professionals train both technicians and support personnel could make economic sense, considering there are more people to train and consistency between branches is essential.

As for transferring records between locations, if most of the business records are on computer, it’s an easy task. They can be sent through a secure Web site or e-mail. The records that are not on computer files should be sent overnight delivery to the home office so they, too, are part of the business records.

Long Distance Management

Managing any business from another location always seems to take more attention than attending to the same tasks locally. Monitoring the new location is no different, especially when it first opens. So plan to be available to watch the newly planted seed from your business grow.

Part of management, of course, includes training and motivating employees, no matter where they are located. As long as your next location is within a reasonable driving distance, you can perform those functions without difficulty.

The time to visit and manage the new location “hands-on” is, at a minimum, at the weekly meeting. You can interact with employees and conduct training, answer questions, recognize excellent performers, and motivate your people at these meetings.

If you need additional time on location after the initial start-up (where you will want to spend time on the site to assure a smooth opening week), spend a day and make sure the systems you have in place are running smoothly.

The secret to a successful new location is to have those systems in place long before you open the doors. That way, you only need to apply the processes already in place at the original location and not rediscover all the stumbling blocks you have overcome.

If your technicians and support personnel know you will be visiting at specific intervals, they will know that you are accessible and will bring questions and problems that need your attention to the meetings. Or, they can meet with you individually.

You will have much better control over the new location if you have these meetings. Naturally, you will have to be consistent in appearing at the meetings and visits. When you are expected at certain times, people will stay organized and plan their meetings or share their concerns or questions with you.

Synergistic Advertising

Your new location is newsworthy. A press release to the local media, which doesn’t cost anything, will help promote your business. In fact, any media attention also will help promote the home office business, too. So regardless of which office customers call, your business name gets more attention.

Usually publications are more receptive to announcements if they are accompanied by advertising. Plan to spend some of your annual marketing budget for ads that not only announce the new location but also offer a discount on service calls or reduced prices on service agreements, etc. When people see the business name in print, or hear about it on the radio or TV, they are more likely to remember it.

To promote the opening of the new branch, a direct mail campaign will alert customers in the local area to the presence of your business nearby. Similar to other media advertising, a combination announcement and discount coupon will induce customers to call.

You may want to consider contacting current and past customers with a direct mail announcement and coupon, too. The announcement presents a good reason to contact customers who have not called for service recently, offering an inducement to call, while at the same time informing them about your expanding company.

Further Expansion

If you plan the expansion of another location properly, you will soon realize you have a system for opening more than one additional location. Once you have the system in place, incorporating some of the concepts I have reviewed, including centralized dispatch and call-taking, you will be able to expand further.

Notice that franchised businesses continue to expand - some worldwide - and open successfully in many geographic areas.

However, caution: Don’t make too grand a plan initially until you have passed two key hurdles:

1. Make certain the home office is running smoothly, that it is profitable, and is automated to the extent you do not need to clone yourself to run the business; and

2. You have tested your expansion plan with a new location and proved that your company systems are effective at setting up new locations with a minimal amount of disruption to the business. No sense expanding and draining the primary location of resources and management.

A final comment on expansion: If the new location cannot soon stand on its own (in other words, it is not profitable), consider reducing the overhead there. If necessary, close that location; you do not want to threaten the liquidity and strength of your primary business.

If you follow these guidelines and cautions, you will be able to enjoy the increased revenues and productivity of your growing business. There will be no stopping you once you experience multiple locations.

Links

• Contact Plumbing & Mechanical