Should you open a second location or double down on the one you have? Early on in my business, I had to make this same exact decision, and it became one of the biggest turning points in my career. I’m going to share everything I learned through that experience, starting with how to figure out your market size.
There are multiple ways to do this, but the easiest thing in 2025 is just Google it. You can also use the US Census Bureau or even ChatGPT to figure out how many homes are actually in your market.
So I Googled it, and there are 27,000 homes in my market. But not all 27,000 are serviceable. Here’s the rule of thumb on what you need to subtract out:
DIYers: 20-30% of homeowners do it themselves. They’re never going to buy your product.
Don’t care: 10-20% just aren’t interested.
Can’t afford it: 15-20%.
Renters: 10-15%.
Rural properties that are never going to be serviceable: another 5-10%.
That leaves you with roughly 30-40% of total homes that are actually serviceable. In my market, that came out to about 9,500 homes. These are the actual numbers I was using when I had to figure out if I wanted to open up a second location. But I also had to decide what my goals were and whether my current location was big enough to support them.
My Story: How I Hit the Ceiling
Let me take you back. At this point, I was probably three to four years in. All my friends in the industry kept growing faster than me no matter how many services I was offering. At the time, I was doing lawn maintenance, fertilization, weed control, pest control, snow removing, and some softscaping. But no matter what I did, no matter what service I added, I just couldn’t keep up. There was obviously way more demand in their markets than there was in mine.
And I was building a company that I hated. So I decided to sell that company and keep the fertilization, weed control, and the little bit of pest control we had added. I knew that was the company I actually wanted to build going forward.
I took this framework, built up the fertilization, weed control, and pest control side, and eventually started hitting those same numbers again. I was doing 20-30% market share with a couple thousand customers in the area, and I started to plateau. No matter what I tried, it just cost me more money. That’s when I decided I needed to look at a new market.
Making the Jump
The closest big market to me was roughly 250,000 homes, but it was also a two-hour drive. There were some smaller towns 45 minutes to an hour away, but they just really weren’t worth my time. So I decided to go after the big market first.
And that’s when things started to take off. All those skills I had built up fighting in the wrong market with the wrong service level finally had a vehicle to take me where I wanted to go. I was in a market where I could actually grow, and once I did that, everything changed.
Light bulb switch. I thought I was a pretty good operator compared to my friends, and I felt like I had a lot of skills. But once I got myself into a new market with more demand, things just really took off from there.
Signs It's Time to Change
If you’re in a similar situation, here are the signs that it’s time to make a move:
Your growth has plateaued. Everything that was working in the past isn’t quite working anymore. Specifically, your customer acquisition cost just keeps going up. Maybe your CAC has always been $100, but it’s started to creep up to $170, $200, and you can’t get it to come down no matter what. And every single platform is showing you the same thing. That’s a really good sign you’ve hit market penetration.
Your market share is at a minimum of 10%. In my market, we were at roughly 20-30% market share. I knew it was time to expand because I had hit all of these things. My CAC was increasing, my market share was maxed out, and we just stopped growing at the rate we were used to.
The important thing here is to make sure you have the exact data so you’re not going off a gut feeling.
Your Three Options From Here
1. Increase Your LTV
Let’s say your core offer is pest control, your customer acquisition cost is about $100, and your annual recurring revenue per customer is around $850. The next thing you can do is add services. That could be mosquito control, rodent control, or lawn care services like fertilization and weed control. Maybe you go from $800 per customer to $1,600. You just doubled the LTV, and now you’ve gone from an $870K company to a $1.6 million company without adding a single new customer.
2. Extend Your Service Area
Every market is a little different. In my market, if I drive 60 miles, it takes me an hour. If I drive 15 miles across town, it takes 15 minutes. For you, driving 15 miles might take an hour. Maybe you purposely shrunk your service area to cut down on drive time. So option two is to expand that area to reach more customers. Instead of 100,000 people, maybe you push it to 150,000.
3. Start a Second Location (or Move Entirely)
This is what most people don’t do, but it’s what I had to do. You can pack up and move your entire company to a new market, or you can start a second location. If you go this route, use the same framework I just gave you. You want to build a business you actually like. You want customers you want to work with. If your ideal customer avatar is that $500K-$800K homeowner who drives the Porsche, the kind of customer we’ve talked about in other videos, this is the same framework you’ll use to go build the second company or second branch.
Choosing Your Next Market
Here’s how I think about it. If you have a couple cities nearby that are 27,000 homes, 10,000 homes, 10,000 homes, and then one that’s 100,000 homes but a little further away, I’m probably going to move to the location with 100,000 people so it can support the business I want to build.
And look, if you’ve already built a business and you’re happy with 27,000 people and 20% market share, there’s nothing wrong with that. But if you have a vision to do something bigger, you’re going to have to find a city or cities that can support it.
If there’s a city 45 minutes to an hour away with a million people that can sustain the business you dream of building, then I would pack up and move there. Obviously you’d do a little more research on what companies are already there and things like that. But this is the exact framework for how to choose your next market.
The Bottom Line
Whether you’re looking to double down on the business you have, open a second location, or burn it down and start somewhere else, this is the framework you’re going to use to go build your next thing or add on to what you’ve already got. If you have any questions or comments, make sure to drop them below.
