This transcript was generated from the episode audio and may contain minor errors.
In today's episode, a listener wonders if it's time to open a second location. She's got a boutique fitness studio that's going well, she's been doing it for five years. The studio is finally profitable, and she's thinking maybe a way to make more profit and serve more customers is to open a second location in a nearby neighborhood. Now, this question can be fraught, it can be difficult. A lot of business owners struggle in this situation of going from, "Okay, one thing's working, surely I can just do the same thing a few neighborhoods over, or if it's not a retail store, it's like an online expansion." It just seems like it's going to make sense, but there's some stuff that you might not consider and that can often be difficult, as noted.
Now, of course, you're listening to this podcast because you want things to be easy, not difficult. So I'm going to do my best to help our listener, Jasmine, help her evaluate her readiness, minimize risks, and expand without turning success into stress. That's our goal. And then it's Chris Guillebeau. Let's hear this detailed question and hopefully give some insight right after this quick shout-out to our sponsor.
Hey, this is Jasmine from Cincinnati. I've been running a boutique fitness studio for five years, and it's finally profitable. Lately, I've been thinking about opening a second location. I've even scouted a potential spot in a nearby neighborhood. But I'm nervous about doubling my expenses and splitting my time between two places.
How can I know if now is the right time to expand? And how do I avoid turning my first success into a headache? Jasmine, congratulations on reaching this point. It's so great that the fitness studio is now profitable and also exciting to be thinking about growth. I do want to caution you, however, because things can go wrong at this stage, and I've seen it a lot.
You imagine that you can just duplicate your success in one thing and then transfer it to another thing, as I said, whether it's a location or a product expansion or something. But often there are some variables that are different, and it requires more complexity than you think. And you imagine, oh, if it takes X amount of work to do this one location, then it's just a matter of adding a certain percentage of work or money or resources, and I can just kind of move over, but it doesn't always work that way. So a couple of things to ask or to consider if you're in this place. First of all, evaluate if you're really ready to expand.
Like when you say profitable, is your studio consistently profitable? Is it profitable year round? Not just kind of a one-time milestone. Is your customer base stable? Like if your first location has a loyal, growing clientele, then that could be a good sign that a second location might work.
If it's just profitable, but you're not quite sure how it's going to go in six to 12 months, that might be a sign to hold off on the second location. Next, analyze the potential location, because of course, a great location can make or break a fitness studio and any kind of retail business. And even if somebody is considering an expansion that's apart from a second location, you still want to do some market research, right? So the point is, do some research rather than just assuming what you do in one location or with one business or one product will automatically apply elsewhere. Next, start small and minimize risk.
Like if you're going to do the second location, can you have some lease flexibility, a short-term lease as opposed to a multi-year lease or maybe a space sharing agreement? I don't necessarily go big here. I think maybe that's part of the mistake is someone is able to make things work in a small location and they're like, "Great, it's time to level up." And then they get into trouble. Okay. So I don't mean to sound discouraging at all.
I just, I want you to be able to keep the success you have and keep your financial cushion as well. The right time to expand is when your first location is consistently profitable, your operations are smooth, and there's clear demand in the new area. If you can say yes to all of that, then I think it's great to expand. If not, I think maybe just be a little bit cautious. Listeners, if you have a question or a comment, situssleschool.com/questions, I'm excited to bring you all kinds of different scenarios this year, case studies, ideas, reports from other listeners.
It's going to be a lot of fun. Can't wait to bring it to you. And of course it's always completely free. That's all for now. My name is Chris Guillebeau.
This is Side Hustle School. From The Onward Project.
