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What to consider before expanding your business

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Location: I want to pick a place that is going to be viable year-round and build long-lasting relationships with companies that use our services 12 months of the year who can help us grow.
—Douglas Crowe, Party Reflections Inc. (describing the company’s expansion into Raleigh, N.C., as a hub for corporate headquarters)

Do enough research to make sure that the local geographic market is ready for a new player. Know what the prices are in that location because of competition, because of history. Don’t just show up, stick a flag in the ground and not know what the prices are.
—Scott McShan, Shaffer Shaffer Sports & Events/Aztec Events & Tents

The right acquisition: Look at the team that is currently in place. Can they jump on board your system, maybe with your software? Can they expand to a bigger group of people without making a negative impact on the business?

Staffing: The tent rental business is a pretty stressful business. [The tent] has to be ready when the curtain goes up. We spend a lot of time and effort evening out the troughs of seasonal work. You can eliminate the troughs with other locations, but the trouble with transferring staff is they never get to regenerate their energy and enthusiasm for the business because they always have to be ready. You can work assets to death, but your talented labor force for the bigger jobs? You can’t work them like a normal job 12 months a year. It was a bigger challenge than we thought that would be.
—Richard Martin, PRO EM

Marketing: A lot of people assume that if they have a strong name in their community, that strong name will move to [a new] location. You have to rebuild your reputation at the new location and have a great set of policies and procedures to maintain your standards.

Trucking: It’s very important that you load everything on your truck that you could possibly ever need. We have to treat every job like it’s a thousand miles away. We load 10 percent more furniture just for the “oh-by-the-ways.” If a client makes a change and we don’t have enough of a product, we can find a local rental company that can supplement what we do. Otherwise, we are forced to send a hotshot truck.

Some of my biggest challenges are transportation and traffic. A lot of times when sending the big stuff, we hire a trucking company to meet us on-site. Sometimes their deadlines aren’t as close to mine.
—John Creedon, Creedon and Co.

Contract labor: We make sure the people we send are well qualified, and we always supplement with local labor.
—George Smith, Mahaffey Fabric Structures

We do a lot with our own labor. When we are doing the big tents, it’s my guys because we know they can do it.

Contract labor is what I call the wild card. You don’t really know what you are going to get. Meeting a time frame can be difficult to attain if you don’t manage on-site properly. A contract labor team doesn’t have the knowledge of the product or isn’t as efficient as direct labor.

We prefer getting our clients involved and discussing what issues there may be and build that into our budget. We try to do as much ahead of time as possible. Surprises are expensive.

Janice Kleinschmidt is a freelance writer based in Palm Springs, Calif.

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