Bowling lanes at Bowl Central in Fareham

Navigating Expansion: When and How to Launch a Second Location

There can be apprehension when you start to consider whether you are ready to launch the second site of your leisure business. The first site is going well, you’ve got proof of concept and potential investment options. So, how do you know if it’s the right time?

We are going to explore the answer to this question but also point out a few key areas of consideration when embarking on expanding your business model.

Considerations for site 1

MANAGEMENT: This is the most straightforward aspect of the transition to two sites. You need to have sufficient experienced managers to operate site 1 without your intervention or you being on any rotas. Your venue needs to have a clear management structure and staff engagement programme to ensure it continues to operate effectively in your absence.

YOUR AVAILABLITY: Up until now, if you’re an owner operator, it is likely that you’ve been heavily involved in site 1, being present, on-site for three to five days each week.

Before you begin to work on the launch of a second site it is important to ensure that there aren’t any tasks which require your involvement. You will need to be able to commit most of your time to your new venture.

Realistically you will need to commit around 2.5 days a week, of dedicated, focussed time to the new venue. So, although you will still be present at site 1 it needs to be able to operate smoothly without you.

RELIANCE AUDIT: To test the preparedness of your managers and check for any operational reliance on you we recommend you undertake an audit.  We suggest you stay away from site 1 for a whole week. Upon your return conduct a thorough audit of the business; the data for the week, a walk around of the venue and meetings with the managers. Your goal is to identify any issues which have arisen. It is likely that you will discover there are a few tasks that only get done because you do them. This audit will give you a clear indication of which processes still require procedures to be documented and any additional training needs.

Once you consider the issues to have been addressed then it would be worthwhile undertaking the exercise again until you are confident that the business can successfully operate without you. You need to be free to work “on” the business, not “in” the business.

Considerations for site 2

LOCATION: As with most investments location is key. In general, you’ll be looking for a town within your region where there isn’t currently a bowling alley. Unlike hospitality venues most towns are not able to support more than one bowling facility (this rule of thumb is not applicable in large cities like London or Manchester which have denser populations). For you this will impact the amount of time you spend travelling as well as the amount of time you can be on-site at either location. You should also consider the range of competition in your potential location (all other places people might choose to go instead of bowling e.g. zoos, parks, beach, cafes, restaurants, cinemas, nightclubs etc).

COST EFFECTIVE: There will be numerous elements which will inherently become cheaper the more of them you require or the more they are used across sites. Opening a second, or more, sites should result in economy of scale in some areas of your business such as brewery products, HR and marketing. Furthermore, there will be aspects which don’t need doing again e.g. branding.

DUPLICATION: There are many aspects undertaken for the launch of site 1, which will need to be repeated regardless of how many venues you open for example finding a site, planning, lease, acoustic survey, power, extraction, utilities etc.

SPEED: The rapid growth of numerous competitive socialising ventures has shown that the more venues you have the quicker you will be able to open them and turn a profit. Once you push past four venues and can pay for a Group Operations Manager, then growth can be rapid.

FINANCES: Clearly the financial viability of additional sites is a key consideration and depends on how risk adverse you are.

For the risk adverse: Are you sufficiently ahead of your monthly profitability performance? Do you have enough money saved to ensure site 1 survive and support the development of site 2 should external factors result in a 20% reduction of revenue? Can you borrow money against your first site? Could you afford to pay the rent for the second site from site one?

For the pro risk: Once site one is making more profit than the budget, that’s the time to work on site two. Economies of scale (as explained above in Cost Effective) come into play and actually spreads the risk.

You will need to be able to staff both sites, without you having to be there. Both venues need to be able to operate without your direct involvement because at any given time you may be needed at one site and need to be free to attend as the business dictates.

RESOURCING: A significant advantage of having multiple sites is the availability of your staffing resource. Although long term appropriation of managers and staff from one site to another is not advisable it can be very useful for covering holidays and sickness.

Site 1 would have required significant amounts of research, sourcing suppliers, exploring finance options etc. That wealth of learning will all be useful in the launch of a second site and will greatly increase the speed at which a second site can be achieved. It is for this reason that we haven’t gone into great detail about the process of site opening (plus our blog on “How much does it cost to build a bowling alley?” is useful in this regard). Instead, as noted from the beginning, we consider the pivotal factor is you and the readiness of site 1 to operate without you.

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