Multiple locations can enhance opportunities and your ability to make more money, but this path is not for everyone; retailers should be sure to ask themselves some key questions first.

There are many economies of scale to be realized with unit growth, but retailers should not step forward and expand until they ask themselves some key questions. The following is a brief checklist that should be carefully considered before expanding.

Change of philosophy. Having a second location is like having a second child. Somebody once said to me, "One is fun, two is work." Many entrepreneurs believe that nobody can do the job as well as they can and maybe they are correct, but if you contemplate that extra location, you have to be philosophically prepared to accept that you are going to have to rely on other people to do part of the job for you. These other people could be family members, partners or employees.

If you choose to take in a partner, then have your attorney draft a "Bi-sell" agreement; this should spell out in great detail how the partnership is to be dissolved if things are not working out between the partners. Employees or partners should be people that you can rely on, and one has to accept that efficiency will not always be one hundred percent all of the time. Sometimes things are going to go wrong; if you cannot adopt an attitude of acceptance you are going to experience a great deal of dissatisfaction and undue stress. If this is the case, then perhaps you should not consider more than one location. This realization is most important and I cannot emphasize it enough. Do not overestimate your ability or think that others will automatically perform in exactly the same manner as you do.

Staff training. If you have the ability to train and explain things to people, you could be on a journey to one of the most satisfying, rewarding and profitable experiences of your life. This is one of the most important aspects of an expansion program. If you have the ability to recognize and retain good people, you can accomplish almost anything and go to soaring heights. Obviously, it is preferable to have these employees on board and trained before the expansion takes place. Any business benefits when employees know what to do and when to do it.

Business plan and organization. Some people have the ability to run one location efficiently, but fail miserably when they expand to the second one. Failure, to a great extent, can be overcome by very careful and extensive planning for expansion. It is far better to "Overkill" on planning and succeed then to plan poorly and fail.

You should have a new vision of what you hope to accomplish, and hopefully this desire is a goal of a particular amount of profit to generate. If you ambition is to expand for the sake of merely being bigger, and you do not have any other goals, then you should stop right here. You can save yourself a lot of money, stress and wasted time. I have seen the occasional individual squander millions of dollars to have a "Big" business, but its not how much you take in. What counts is how much profit you take out and deposit in the bank.

The more advanced planning you do, the easier it will be to guarantee the success of that second location. You are in great shape if you can do your own financial spreadsheets. But if you cannot, then employee a professional that fully understands all aspects of your business and is capable of producing realistic projections of sales, expenses and the bottom line. These projections should reflect each month's activity for the first year, and then quarterly for the next three to five years.

These income statement projections can be translated into cash flow projections, showing when cash will be received and when it will be paid out. The difference will indicate the accumulation or shortfall of cash and the resulting amount that has to be provided by the way of loans to the business. Also, take in to account what expenditures will be required for capital equipment, inventory levels etc. Financially, you are extremely healthy if you do not have to borrow funds at all and the business can sustain itself.

Usually the more planning that is done, the quicker the new business breaks even or shows a profit. It will be enough of a headache having a second location without it being compounded with financial troubles.

In the planning stage, aspects have to be carefully considered such as proximity of the second location to the first, computer systems, in-house stationary, inventory receipts and transfers, daily banking, payroll and overtime, daily staff scheduling, whether it will be a 24-hour operation, emergency calls at night, daily reporting to head office, authority for limits on check signing and purchasing, etc.

Opening a second location is not something you do on a daily basis and the feeling of satisfaction is a "Buzz" seldom experienced operation is well orchestrated from the outset. This could be similar to watching your child being born - it does not happen often but an uncomplicated delivery is like a prayer being answered.