by Fulvio Max

Created on: January 05, 2009

Growing a business always means more money? Wrong.

Read this article to see why.

There are two main kind of costs: Fixed costs which are the ones you have for the rent, insurance, workers... and sale costs which are the product costs such as acquire costs, transport costs and more.

The first kind of costs are the ones you have to take pretty good care of. To double your business effectively your fixed costs should at maximum double too. If they (the costs) grow better than the business you will not make so much money and the effort and the trouble will be the same. Not to mention that your costs per sale can increase as well which will make thigns even worse. Let's say the second store is very far away and now you need to pay more for trucks with all the costs they have (fuel, driver, insurance). It doesn't matter how much you sell, you will still pay the same fro the sales.

So to make sure you will open a very good second house you need to do the follwing:

-Check for the fixed costs. The rent must be almost the same as well as the taxes, the workers salary, the insurance price, the material costs and all that stuff.

-The cost per sale must be the same or less because the more you sell the less you make because usually you will have to pay more taxes.

- Check if you can handle the second store like you handle the first one. It's very easy to get lost in the sea because the second will mean always the double of the work, papers, tasks and more. A manager is usually the best solution but he will also mean more cash out of the business.

- The second store could be a mirror of the first one. This way you would not have to think all over again how to so it. It will be like a carbon copy and paste.

- Don't forget to tell your already costumers that you opened a second store. Curiosity will bring them there faster than you think. It's a sure kill

- Frankly you will attract even more people with the second door opened because you show that your business is good n and expanding at a fast rate. If you are successful in a few months with the second store start considering the third one.

You see, it's not hard to grow a small business specially if it proves to be profitable. Taking care of the costs will take care of the rest. Meanwhile why don't you start thinking right now about how you can expand your own business? If the costs are not higher don't even think twice.

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