How do you choose each new location?
The first thing we’ll do is take a look at markets that are similar size to Columbus or markets that are growing and have a lot of business activity coming in. After we find a market we think may be compatible to us, we’ll go in and do some very basic research of who the competitors are, who the players are as far as larger businesses are concerned, what kind of unemployment market they have and what kind of general economy they have.
The other thing we’ll do is research certain geographics of the city that would include how difficult it is to get around the city from a travel standpoint, where’s the labor base based at in that city, a lot of different general things about the city that you would need to know to open up a business. The most important thing, though, is obviously who are the clientele and what are their needs.
Once we do that, without even committing to space in those areas, then we’ll begin a human resources search-we’ll look for people. We’ll confirm with them what we feel should be the most likely or logical place for the facility.
How do you build a new customer base?
We’ll do some advertising in the media, but typically our strengths as far as getting our name on the street are within the sales people in that city, networking with individuals that they may know and also just general cold calling on the largest accounts that we [find] through general research. Typically the largest employers are going to have the most people moving around.
What costs are involved in opening a new office?
When we opened Cleveland and Indianapolis and Cincinnati, we projected minimal investments of about $150,000 for the first year. In opening up Louisville [Ky.] that dollar amount would be roughly the same. In opening up Charlotte [N.C.] that dollar amount was approximately $100,000 higher.
We did a lot more investing up front in people and in advertising in Charlotte due to the simple fact that we didn’t have an existing customer base in that city. And we obviously got a larger facility because we couldn’t rely upon resources from other cities as often in Charlotte, N.C. It’s not as close as any of our other branches.
How long does it take to recoup the opening costs?
When we opened up our first two offices [in 1989], it was approximately 30 days before we were generating any type of revenues, and it was 12 to 24 months before Cleveland and Indianapolis were profitable entities. Now, in comparison to that, when we opened up our Cincinnati branch [in 1995] we were billing revenues immediately and we were profitable within 90 days. When we opened up Charlotte just recently we were billing revenues immediately, and we project to be profitable within the first year.
Our goals are to have [each opening] paid for within the first 24 months. We’ve accomplished that in Cincinnati, we hope to accomplish that in Charlotte and Louisville, and our first two initial ventures in Indianapolis and Cleveland it probably took 36 months for us to be totally in the positive.
What challenges do you face with management located in Columbus and branch offices in other states?
Outside of the obvious logistical challenges that we’ve tried to correct with the purchase of [an] aircraft, the biggest challenge we face is getting people to buy into our culture and our organization. Each city has its own little particular makeup culturally. It’s figuring out what that culture requires from a motivational standpoint and somehow mixing that into your own culture without sacrificing what you want to do as an organization as a whole.
Trial and error is a lot of it. We try to be as up front with people as possible. We try to screen them as thoroughly as possible, especially in the few critical positions you’ll fill when you open up a branch. You try to make sure you get people that have the same customer service philosophies we have and that are willing to work hard and sacrifice certain personal things to service the customer.
What have you learned from opening each office?
I think the biggest thing we learned is we could not waltz into a city and proclaim to be the best office mover in Columbus, Ohio, and expect people to listen to that. We had to earn the trust and earn the reputation in each city.
Another thing that has been very critical for us to learn is that it’s worth investing in good people. We tried to open up the first two branches on a shoestring. We tried to hire inexperienced people who we thought we could mold and train quickly. What we have learned over the past is we’re better off finding proven performers in the service industry. Even though they’re going to cost you a little more, if they’re a solid, proven performer in the service industry, you’re typically going to bring your learning curve along a lot faster.
Another thing that we’ve learned is that we have to stand on our own two feet as quickly as possible from an operational standpoint. We cannot rely upon sending resources in from another city to help perform relocations. A, it’s too costly, and B, you don’t have the stability that you need.
One other, probably critical, thing we learned is just because you have a similar customer base like Bank One in Columbus, Ohio, and a Bank One in Indianapolis, Ind., does not mean that you’re going to be handed business from that particular similar customer base. It becomes a people issue and it becomes a relationship issue. The people in Indianapolis are accustomed to dealing with certain people, and no matter how good of a performer we are, it’s difficult to convince them to give us an opportunity to show them we have a unique brand of services.
What advice would you give others considering branch offices?
Without a doubt, most importantly, make sure you get good people who will buy into your philosophies of how you want to run your business.
Don’t compromise anything about what your success has been about. For example, if you’ve had certain policies and procedures that you feel have been part of your success, keep those in place in other cities no matter what that cultural environment may say about it. If your dress code’s been successful in one city, keep it in another city. There’s probably a good reason it’s been successful for you in the past. Don’t change success.
