Building a Branch Network for Your Business
Building a branch network for your business is still relevant and appropriate, despite the exponential growth opportunities offered through online platforms. But, expanding your business through physical branches can only achieve so much. Ideally, a click and brick strategy, that combines both physical and online expansion, is best for enabling and supporting business growth. On The Money Show with Bruce Whitfield, Pavlo Phitidis explained the all-important aspects of building a branch network for your business:
Why build a branch network?
Building a branch network for your business offers you exceptional opportunities to get up close and personal with your customers. Your branch network provides an all-in-one sales and distribution platform and validates your business’ existence to support your online efforts. Through your branches, you can easily showcase products that require one-on-one interaction with your customers and enter new markets or territories. A branch network puts you in control of your brand and customer experience, but it can go very wrong.
What can go wrong when building a branch network
Getting your branch network strategy right is critical, but three primary factors can make it all go very wrong. These are:
- Your location strategy: You may feel confident enough to replicate your successful business in another location, but without comprehensive local knowledge, you may fail. What works in Johannesburg does not necessarily work well in Cape Town. There are significant differences in business approaches, lifestyles, and cultures, that directly impact your business’ ability to succeed in a new territory. Notably too, expanding your business’ branch network will entail signing long-term leases, hiring more staff, and ensuring they are properly trained. Building a branch network takes significant investment, including money, time, energy, and management.
- Your leadership approach: Entering a new territory demands a different type of leadership approach that - for your branch network to be successful - includes hiring the right type of people to help you grow your business. Business owners often make the mistake of promoting their top salespeople into managerial positions, but a great salesperson doesn’t necessarily make for a great branch manager.
- Your control systems: Building your branch network takes time and learning. Ideally, your first branch should be closely located to your head office - it’s easier and cheaper to take a quick drive over to your branch, rather than flying there. Locating your first branch close to your head office means you can build, learn, tweak, and improve, your control systems, before replicating them across further branches that will be situated far away from your head office.
How to build a branch network for your business
- Before you open that first branch, work through your indirect sales channels to test your product and learn more about the market you’re looking to enter. Work with your distributors, retailers, and wholesalers, to affirm and validate the business potential within this new market. If possible, set up a small pop-up shop within one of their stores, and learn more about your new territory, without having to make too much of a financial investment.
- When you’ve settled on a new branch location, adopt a flexible strategy that doesn’t over-commit you. Sign a short-term lease for the premises and set up short-term initial contracts for your staff. It’s far easier to extend a lease or employment contract, than it is to back out of one.
- Building your branch network will take huge investment of time, money, and training. Training is best done in your head office, ensuring that your system of delivery is adhered to throughout each branch. Every facet of your business can be systematised to ensure adherence, and that includes the customer experience, operational conditions, reporting, and marketing. Implement strict facilities management and control processes, using technology to support them. That can include biometrics, cameras, inventory, and Point of Sales (POS) systems.
The three big deals of your branch network
There are three big deals you cannot afford to get wrong when you are building your branch network. These are:
- Be sure you know what business you are in, and do not be swayed from this. Branches that move you away from your focus will fragment your business and eat your profit margin.
- Build your branch network slowly and purposefully. Your first three to five branches should be built under close supervision, to ensure you have your branch network systems correctly in place and working optimally. Thereafter, you can look towards scaling up your branch network at a faster pace.
- Build your branch network to grow your business and increase your market share by combining your physical expansion strategy with your online strategy.
Building a branch network for your business can invigorate business growth. At Aurik, many of our clients have branches. We can work with you to get them working for your business rather than against it. It’s all about building an Asset of Value.