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Branching Out

Dear Dave
We are a well-established, successful civil engineering and survey firm working primarily with residential and commercial land developers. The local market is getting pretty well built out. Our clients are basically running out of land to develop. We feel that we are going to have to open one or more offices in other locations around our state in order to just sustain our firm at its current size as there will be fewer and fewer project opportunities going forward in our home market. We have no direct experience in opening branches. Can you give us some insight?

Dear LW
Priority number one is to do some homework and thoroughly and objectively research the potential and the competition for any areas you are considering. As part of this investigation you might begin by meeting with your clients and asking them what they think and what their plans might be. Chances are they are asking themselves the same questions as you and perhaps you can help each other sort through your options together.

Assuming you’ve done a good job of selecting the location for your new branch there are several things that can be done to help insure your success. First, be sure to form the nucleus of the new office around your own people. If you don’t have core leadership that is willing to relocate to the new location, you should think twice about opening a branch office. Buying a local firm, or trying to hire someone in the area to start your new office from the ground up, has a low probability of real success. It is important that tried and true staff who understand what makes your firm and your services special seed the new office.

Second, be sure your firm’s processes, standards, procedures and techniques are well defined and able to be replicated in the new setting. A Big Mac in Omaha tastes the same as a Big Mac in Chicago. Likewise, a design and resulting set of plans and specifications should be representative and recognizable as work your organization does anywhere without regard to which office produced it. Doing this has the added advantage of allowing you the potential to exchange projects and or manpower across the organization for maximum productivity and performance. As you’ve described your circumstances, this is likely to be something you will wish to do.

Third, avoid the natural temptation to establish the branch as an independent profit center. Think one organization and don’t set up accounting and reward systems that even appear to act as an impediment to the free exchange of projects and or manpower described above. Where a project is done or who does it should never in anyway be influenced by bean counting. The best way to accomplish this is to sort and denominate your organizational management accounting by projects, not by offices.

Fourth, have sufficient capital available to invest to start the new office. Office space and equipment, computers and software at the branch should be of equal quality and quantity as the main office. Make all reasonably possible investments in technology to effectively link the offices when it comes to communication. Keep accounting and human relations functions centralized.

Fifth, do everything you can think of to avoid or at least mitigate the emergence of "them and us" attitudes in the organization. Work very hard to keep people thinking of the organization as one entity. Create a regular exchange of projects and people between offices. Seek to relocate staff between offices for promotion purposes. Establish the makeup of any committees with representatives from each location. Senior management should be frequent visitors in all offices and even spend days at a time working from various offices whenever possible.

Sixth, have some specific goals and milestones established for your new branch. Check progress against plan frequently and make adjustments as you go. Good luck!

Wahby and Associates