Opening a second location is a great opportunity for any business if the timing is right and your volume of work supports it. Before deciding to expand, though, you need a concrete plan of action that takes into account various challenges and provides solutions that keep them from becoming setbacks. Controlling cash flow is an important part of the process because the timing of your income is just as important to meeting the expanded overhead expenses as its size. That’s why accounts receivable financing is often the turning point of a business expansion.

1. Maximize Your Workload

Before opening a second shop and hiring the staff for it, you need to be sure you can generate the business needed to support the location without undermining your own profits in the short-term. Take on as much work as you can reasonably handle without compromising quality, staff up to capacity, and spend as much time as possible slightly too busy. Often, it takes a marketing investment to bring in the extra business, but the tight turnarounds and investment in resources will be worth it when you are ready to open the second site.

2. Research Market Capacity

One of the mistakes that is most common to businesses that expand into a new location is market saturation. If you put your second location too close to your first, then you’re competing with your own location for customer attention. Find out how far people are traveling and how many competitors are around, the area’s demand for service, and other factors that can help you pinpoint a minimum worthwhile distance between the locations. Often, going to a neighboring city is a great idea just to be sure you’re outside the radius where you would compete with yourself.

3. Structure Predictable Income

Small business income tends to be unpredictable because the natural cycle of business feels more pronounced when you do less work. This is often due to cash flow issues during slow times that stem from irregularity and not lack of income. This is a challenge that can be overcome by using accounts receivable financing to get an advance on your invoices regularly, providing predictable pay dates that allow you to make all your own outgoing payments to suppliers and financing companies on time.

4. Monitor Your Finances

Your business is ready to fund the second location when you have the capital to invest in startup equipment and facilities, the income to support the utility and supply costs associated with the second location, and the staff to run it. With proper planning, you can split your maximized crew to start and then hire new staff to be trained by your veteran crew, simplifying the transition to a new location. To start, talk to a financing professional about how accounts receivable financing would change your cash flow cycle.