Carefully consider the location of a satellite office to avoid costly mistakes.

By Michelle van Schouwen

Would your professional service or consulting company benefit from having an additional brick-and-mortar office in a different city or state?

I’ve had ample opportunity to analyze this matter. For several years, my small Massachusetts-based marketing company had a sales and service office in Greensboro, NC. We engaged with a number of excellent southern companies as well as national clients based in the south. At one point, the fledgling North Carolina office even brought in higher revenues than our longer-established New England home office.

However, keeping the satellite office staff on target and assuring that clients were happy and their projects well-managed was challenging. As a principal, I ended up spending a lot of time in Greensboro. Then, a serious economic recession hit. We decided to focus on our home territory, where the bulk of our production and management staff was based, and regretfully pulled up stakes and shuttered the North Carolina space.

I’ve often wondered what might have happened if we had stayed the course.

Fast-forwarding to 2018, with greatly improved digital communications and enhanced feasibility of having professional staff working remotely, I suggest a refreshed set of considerations as you consider opening a new physical office location.

-Understand your purpose. If you just need a sales or customer service presence, perhaps you can hire one individual who will work from a home office or shared office space. Today, digital communications let you conduct business across the miles with ease. You can integrate “face-to-face” online meetings into your expansion plan and potentially avoid supporting an additional office space. However, if you want to establish a truly significant toehold in a new region, you may do well to spring for a staffed physical location.

-Evaluate the new market’s culture. When we first entered the North Carolina market, we worked with a staff member who had moved to the area and worked from home as sales and account manager. It eventually became apparent that the North Carolinian-based businesses we were encountering strongly preferred locally tethered marketing firms, so we opened a small office and, over time, added a few people from the Greensboro area to staff it. This worked well.

-Also carefully assess the new market’s real potential. Don’t jump in too deep until you are fairly sure that you have a very profitable opportunity in the region, the resources to hire skilled and motivated staff and the sustained interest to make this a long-term commitment if advantageous.

-Look at a map! Unless your clients come to your office, you probably don’t need two office spaces within 25 or 50 miles of each other. You probably don’t need an expensive, unstaffed office awaiting your occasional visit, either. This typically doesn’t make you much money. In other words, avoid making expensive vanity moves.

-Don’t underestimate satellite office staff’s need for face-time with management. I became a frequent flyer to Greensboro. Similarly, no matter how carefully you staff your new office, you may find yourself needing to be there yourself far more often than you’d planned. Your new staff may need your personal support, no matter how often you interact meaningfully online.

-Carefully integrate your new location into your long-term plans. Our Greensboro office had the potential to outgrow its parent office. In the end, we were not willing to make the commitment to make that the lead location, something that would have meant disrupting our New England team and relocating our school-age children to a new part of the country. Just know that success can bring its own set of challenges.

Geographic expansion can be an opportunity or a liability, depending on your planning and execution. And office space is an expense, period. Just make sure that, in the long run, adding and staffing a space will build up the black – not the red – on your balance sheet.

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Michelle van Schouwen enjoys an “Act 2” career as principal of Q5 Analytics, providing advocacy and communications for climate change mitigation and adaptation. See Q5analytics.org. For the past 32 years, Michelle was president of van Schouwen Associates, LLC (vSA), a B2B marketing company. In 2017, van Schouwen Associates was acquired by Six-Point Creative Works, Inc. of Springfield, MA. Michelle supports the Six-Point team in an advisory capacity.