Adding new offices to an existing business is almost inevitable if you’ve been around long enough.
In part this is a practical result of looking for new ways to expand once local markets have been maximized.
In part it’s anthropological. A nod to the explorer that exists within every entrepreneur.
Adding new offices is rarely done well. And often in such a way that the potential benefits are reduced by more than fifty percent and the costs increased by a third. A quantifiable piece of analysis based on comparative studies.
Most businesses succumb to these results because they fail to identify the characteristics that made them successful locally.
- They understood what they were selling
- They understood why that was valuable to the local market
- They were trusted by local customers
- They learned from their mistakes and applied the knowledge to make themselves better
- Their systems were designed to support their business and improve their customers’ experience
- The employees believed in the owners’ vision and were motivated to help the entire business grow
- Employees were rewarded for creating value
- Investment decisions were made that benefitted the whole company
When you add a second or third location, each of these characteristics is immediately put under threat. And many are eliminated entirely.
They need not be. But getting geographic expansion right requires the following:
- A clear strategy
- The ability to identify your company’s core DNA and to find someone who can plant it and nurture it in new locations
- The elimination of the ‘not invented here’ pathology that most human beings instinctively bring to the table
- Systems and practices that don’t just connect each location, but inter-twine them
- A financial management and compensation philosophy that aligns everyone's interests
- A willingness to defend the whole while supporting the parts
These are not easy to come by. But they are critical to any successful expansion.
And to making sure that ‘going horizontal’ is a growth strategy.
Not an analysis of your P&L.