In Minor's League: March 2001

ANSWER: Geographic expansion is a logical move to make if you want to grow your business. As I mentioned in last month’s column however, make sure you have the systems and infrastructure in place to make it work. Assuming you do, here are some things to consider.The most important issue pertains to your staffing of the branch. Needless to say, you want a manager that you are extremely comfortable with. This individual will be the key to your company’s ability to expand.

I strongly suggest promoting from within your organization for this position as opposed to going outside your company. Having a loyal associate who you know well and who understands your corporate culture is an absolute necessity for your first branch. Hiring outside of the company is just too risky. The compensation structure for this individual is also important. Make sure this manager has incentives in place that reward based on quantifiable success for his or her branch. Be specific about what is important and reward him or her for successfully accomplishing goals.

The reporting mechanism you have in place for the branch is also important. At minimum, I suggest requiring a weekly management report that allows you to monitor key success factors in this business. The information contained in this report would need to include things like sales data for the branch, staffing updates, customer additions and cancellations, and depending on whether you central or decentralize your accounting system, some type of financial report.

This data should be submitted to you in a timely fashion, and you must commit to reviewing it and providing feedback to your manager right away. This may seem obvious, but how you as a leader manage your branch from the home office will probably be different that what you are accustomed to. So developing your own leadership skills and having the right reporting mechanisms in place is going to be very important.

Another key success factor pertains to the development of your corporate culture in the branch. Make this a priority for your branch manager and hold him or her accountable. I could write a book on developing your culture - suffice to say, it is important.

That means you must be involved in the development of the culture. In fact, as the business grows, this may be your single most important responsibility. If you promote your company’s mission and values at every opportunity, it becomes second nature to your employees and they will live it daily. You must, however, make this a top priority.

There are numerous other logistical and tactical issues to consider as well when branching out geographically, such as locating the branch. Conduct a thorough evaluation of where you want to locate the branch. Ask these questions: what is the market potential? Who are your competitors? What are the seasonal or horticultural considerations you have to address? Where will your labor come from? Where will your physical facility be located?

The biggest mistake one can make is assuming that because they succeeded in one area they will automatically succeed in a new location. Obviously, you hope that everything you have in place is transferable, but each market has its own idiosyncrasies that must be addressed.

The bottom line is to do a thoughtful evaluation of all the above. Don’t shoot from the hip, plan carefully and your chances at success will improve.