How to Choose a Second Business Location: The Top Things to Consider When Considering an Expansion

Your small business is doing well very well… so well in fact that the idea of expanding to a second location has crossed your mind a time or two. Now that you are thinking about expanding, understanding how to choose a second location is key to continued business successes. But you are now asking yourself, “How do I pick my next location?” In the following post we will review the top 5 considerations every small business owner should think about when considering expanding to another business location.  Let’s jump in!

Foot Traffic

One of the biggest draws to choosing a next location is the idea of foot traffic. How many people stroll through, by, or near a business is one key to getting customers. Does your company rely on major foot traffic? If you run a company that does not rely heavily on foot traffic, than this may not be as big of a factor. However, if most of your current business profit comes from physical foot traffic, then choosing a location that has plenty of walking bodies is top priority.

Tip: look into other businesses in a potential area and ask what type of foot traffic they get on a monthly average. Then compare to a few other locations your considering.


Money is a big factor when choosing a location. Finding out how much a potential space will cost you is key when choosing your next location. It’s not just the cost of rent you should be asking about, it’s the cost of the utilities as well that need to be considered. Does your business model use a lot of electricity or is most of the cost related to water charges? Knowing what the rates are for utilities, the rent costs in that area, and comparing those factors to the profits you currently bring in is valuable to know in advance.

Tip: Look up average utility costs in the area you are considering and compare to current rates for projections. 


This one may seem obvious but knowing how accessible the space is may make or break it for you. Not only should you consider how accessible the location is, you should also consider if people would prefer that location over your current location. Having too close of business locations may drive no new traffic to the expanded site. When looking at accessibility, look at how easy it is to get to, how easy it is to park near, and how many new possible customers you could get by popping up shop in their new neighborhood.

Tip: Ask customers where they come in from when shopping and then map out where you are missing some possible traffic.


Competition can be a good thing. It can also be a not so good thing when considering an expansion. If you’re into the business of selling coffee, it may not be wise to plant your new shop right next store to a major coffee chain. When you’re considering where to plant your next shop, consider looking for locations that don’t have your style of business, but could see a need for client base in the area. If the only dog groomer in town is a 40-minute drive, and you’re in the dog grooming industry, consider placing your shop in a needed location.

Tip: Map out the other competition and see where there is an access point to tap into for your shop.  

Future Growth Opportunities

Businesses need to look to the future while also focusing on the present. When looking for your next spot, consider looking where new building development may occur. Some of the most popular shops are ones that were built before massive home developments and other retailers were sprinkled around them. Look into where the region is expanding services and housing and find a place that has potential for good exposure as the town grows.

 Tip: Check your local area development bulletins and find out what projects are being built and city plans for expansion or restoration efforts.

Running a successful business is no simple task and choosing where to expand that business can be even more overwhelming. By reviewing some key considerations for where to set up you next shop, business owners can be better prepared for the choice of where to start their expansion. Looking into and considering various factors when choosing a second business location can help reduce the risk and increase the reward to your next location. Happy business location shopping!

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