Many successful FedEx contractors reach a point where they are ready to grow. With
reliable returns and strong cash flow, a FedEx contracting business is an attractive model for expansion. However, this growth brings a critical decision: should you expand your operations close to home or pursue opportunities in remote locations?
While expanding can significantly boost your earnings power, the location of that new operation can make or break your success. We've compiled many of the common lessons and experiences from those who have already traveled this path and the findings are below.
The Case for Local Expansion
For contractors seeking their first or second expansion, a local opportunity often provides the clearest path to success. Staying close to home allows you to test your multi-facility management skills without overextending your resources.
Proximity Enables Hands-On Leadership
Being within a half-day’s journey or closer to your new operation allows you to provide direct leadership when it’s needed most. Your physical presence reassures team members that support is always available, especially during difficult periods. (BCs) in particular benefit from having accessible guidance from ownership, which helps build a strong foundation from the start.
The best rule of thumb is to only expand to terminals that are within a half day's drive of your current location.
Easier Systems Integration
When your facilities are nearby, it’s much simpler to replicate the successful systems and processes from your home operation. You can personally oversee the implementation of training programs, ensuring consistency and quality control. Operational troubleshooting also becomes more manageable when you can be on-site to address issues directly.
The Challenges of Remote Ownership
While remote expansion can be lucrative, it requires a solid foundation of established systems and proven leadership. Multi-facility operators with a strong track record can succeed with distant opportunities, but the risks are higher.
Leadership Gaps Can Be Costly
Without a consistent leadership presence, remote teams can falter. Distance makes it difficult to address operational issues quickly, and even experienced BCs need guidance and goal-setting from ownership to stay on track. A lack of direct oversight can lead to decreased performance and a dip in morale.
Higher Management Complexity
Maintaining a cohesive company culture across geographically separate locations is a significant challenge. Communication becomes more complex, and the time demands of managing remote operations increase substantially. You'll also need to account for the financial and logistical costs of frequent travel and more robust technology systems to manage from afar.
Key Factors to Consider Before Expanding
Before you pursue any expansion, it's crucial to perform an honest self-assessment of your business's readiness.
- Leadership Capacity: Do you and your current team have the time and energy to support an additional operation? Are your systems at your home facility strong enough to run smoothly without your constant attention?
- Financial Position: Do you have enough capital to handle potential challenges during the expansion phase? It's vital to maintain healthy cash flow and reserves to weather any unforeseen storms.
- Long-Term Vision: What are your ultimate business goals? Do you want a hands-on role in daily operations, or are you aiming to build a more passive investment portfolio? Your vision should directly influence your expansion decisions.
Chart Your Course for Profitable Growth
Both local and remote expansion can lead to profitable growth, but success depends on choosing the right strategy for your current situation. Local expansion generally offers lower risk and easier management, making it ideal for those new to multi-facility ownership. Remote opportunities become more viable once you have established strong, documented systems and developed reliable, autonomous leaders.
Ultimately, the best path forward starts with an honest evaluation of your leadership capacity, operational maturity, and long-term goals. Making the right choice will set you up for sustainable success and help you build a stronger, more resilient business.
