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Adding Satellite Facilities

(June 2012) posted on Mon Jun 04, 2012

"When it comes to growth, every print provider should at least consider expanding their business by supplementing it with additional locations as a part of their strategy."

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By Marty McGhie

A production component
Adding a satellite office that includes both sales and production is obviously a more complicated move. One of the biggest challenges is the expense of duplicating equipment in another facility. While it’s unlikely that your satellite office will completely replicate your current equipment roster, once you begin adding pieces of equipment, there are numerous issues that accompany that decision.

First and foremost, you’ll need to hire personnel to run the shop – finding qualified people is always difficult. And there’s the expense and effort needed to now maintain inventory in two locations in order to support sales and production. Plus, any printing equipment will need to be supported by finishing capabilities. Another factor: managing the production processes to ensure quality.

So, yes, there are challenges. But establishing a satellite production facility can create great benefits to your business. You will have redundancy with equipment and production, which can be a huge advantage in the event of equipment failures or other issues. More importantly, an additional production site can offer services to your new local customer base in a much more timely fashion. You will likely save these new clients money when it comes to shipping costs, packaging costs, and other such expenses.

In addition, having a facility in a location near your customers sends the message that you care about their business – so much so that you want to be close enough to service their needs. Establishing production at a satellite facility will also provide critical support for your sales staff in the same location. My take is that your chances of success in a new location are likely to be enhanced if you opt to add production to the operation.

Homework time
The decision to expand your business to a satellite facility is not an easy one. Our own company opened up a sales office in the San Francisco Bay Area 10 years ago and we have never regretted that decision. On the other hand, I know several businesses that have had the opposite experience with satellite offices, eventually shutting them down.

While there isn’t really a right or wrong answer – nor any methodology that will prevent risk on your part – make sure you carefully weigh the pros and cons identified here to ensure that you’re making the correct decision. Without question, opening up a satellite office is a major challenge to any business. But if you do your homework and execute a well-planned strategy, you can create some great success for your business as you move forward.

Marty McGhie is VP finance/operations of Ferrari Color, a digital-imaging center with Salt Lake City, San Francisco, and Sacramento locations. The company offers high-quality large- and grand-format photo, inkjet, fabric, and UV printing.