Every small business owner loves the idea of expanding their business. Whether they are increasing operations, expanding to a new location or just taking on larger orders, expanding is directly associated with success. While these times can be very exciting and gratifying, there needs to be some considerations before plowing forward with your business’ plans to get bigger.
New Holland Brewery has scaled back its plans to expand from just its Holland location to a second spot in Downtown Grand Rapids. Michigan’s third largest microbrewery is delaying the move because they want to find the right situation before pulling the trigger. New Holland president Brett VanderKamp said that finding the right location and the state’s liquor code, which specifies that microbreweries producing more than 30,000 barrels per year are limited in the number of taprooms they can have, are the two biggest factors. New Holland’s current location is currently trying to complete an expansion and it will be right about that 30,000 barrel mark once complete.
New Holland’s approach should be noted by all small businesses. The decision to delay the move to Beer City, USA shows that New Holland is considering both the business aspects of the move and the legal implications. Many small businesses are so eager to expand that they fail to fully consider the implications of expansion and that is when growing can actually hurt your business.
Grand Rapids has been named Beer City, USA again for the second year in a row. It would only make sense that microbrewers from the surrounding area would like to be a part of that marketing boom. It would be easy to see a microbrewer rushing to an available location just because it’s available and they want to be in that location now. They might compromise on if the location fits what they need, can grow with the business, can attract customers, overhead impact, etc. In the end, rushing in to just get it, might end up being a burden. This is not a sound business decision and while your business might not be brewing there are likely other business factors that must be considered for your business.
Businesses that produce and serve alcohol have strict laws they must abide by. Failing to look into the legal implications of expanding can quickly cause big problems. Even businesses that do not serve alcohol need to consider the law before expanding. There are other industries that are regulated by statute. Also, doing business in a new state, interstate or international shipping, impact on existing contracts, and employment laws must all be considered.
This is on top of the fact that you need to restructure the management of your business. If you have one location now, everyone is there every day. You can oversee most if not all of the operations and you are feet away from being able to jump on problems when they crop up. With a second location, you not only have to hire someone to manage one of the locations but you are going to relinquish some of your involvement with business because you cannot be everywhere at all times. Even expanding operations can mean the hiring of new supervisors or management. This can be complex and making sure you have your business legally protected is important.
Expansion is exciting for a small business. It’s a sure sign of growth but as New Holland Brewery is doing, it needs to be calculated and deliberate. Excitement needs to give way to planning. A small business attorney can help guide you through this process and help you avoid the potential issues that lay in front of your business. Whether you are a brewer, a manufacturer or salesman, your business expansion needs to be done right the first time.
Source: “New Holland postpones plans for downtown Grand Rapids brewpub” by Garret Ellison of MLive.com