One big outlet or several small ones?

In short: a big outlet and several outlets each have advantages, but neither guarantees profit. Before deciding, look at how your business attracts customers and whether your management can keep up.

One big outlet

• Upside: everything is in one place, so it is easier to manage and the owner can see what is happening.
• Risk: rent and fit-out are large, and if business does not come, all the pressure sits on a single outlet.

Several outlets

• Upside: advertising, purchasing and training costs are shared, and the brand is visible in more areas.
• Risk: the owner cannot be everywhere, and every new outlet adds a layer of management. Without systems and reliable managers, one weak outlet can drag down the others.

Five better questions than "big or many"

1. After expanding, did customer numbers actually rise?
2. Did productivity per staff member improve?
3. Did efficiency and speed get better?
4. Did service quality and staff attitude hold up?
5. Does each outlet run normally when the owner is away?

Dominate one area first

If you open branches, clustering them in one area usually works better than scattering them: staff can move between outlets, customers can visit any branch, and management takes less effort. A bargain location far from your base rarely delivers the benefits of a chain.

Running a business is a marathon, not a 100-metre sprint. Winning at the start matters less than reaching the finish.

Adapted from Dave Tan's book How High Should Your Customer Retention Rate Be? (2014, in Chinese), updated for today. About the book

Author: Dr. Dave Tan, DBA — Founder of Vital Design, Doctor of Business Administration (DBA). A business consultant to salons and SMEs since 2003, and author of a book on salon management.