If you read one of our older, but more popular posts, “7 Deadly Sins of  Bad Branch Strategy“, you’ll remember that the 2nd sin was “Footprint”. There, we talked about operating a branch that is simply too big. So, if you don’t want to commit the sin, but would rather run a branch that is smaller, you’re in luck. Below, we outline 4 concepts that can be developed to compliment your branch network, but can also definitely operate on a smaller scale. 

Micro Branch

The Micro Branch, or more simply put, a smaller branch than your “typical” branch, has many upsides: 

  1. Technology – In-branch technology has allowed for a more safe and secure way to operate a branch. Tech, such as Cash Recyclers, has not only done away with the traditional bullet-proof glass, but the teller line altogether. When you need fewer things, you can do what you want in a smaller space. 
  2. Cost to Own – From an overall budget perspective, smaller spaces mean smaller price tags. Even if the cost per square foot is higher in a Micro Branch compared to a traditional 3,000 square foot space, the total price will be less. Less overall cost may mean that you can get two Micro Branches out of what would have traditionally been one. When you factor in land costs and construction costs, an average branch of 3,000 square feet may run anywhere from$750,000 to $3.5MM. It could even end up higher after factoring in location or remodels versus ground ups. A Micro Branch can presumably be divided in two, but the reality is, the costs will likely be less when factoring in total square footage around 1,000 feet and operational cost upside. 
  3. Operational Cost – A smaller footprint means fewer things and less people to run those things. From a staffing perspective, you may be able to cut employee needs in half right out of the gate. Depending on size and features, you could possibly even run the branch with just a single person if need be. Additional cost savings happen through equipment; with fewer machines all around, no drive-thrus or the tubing that comes with it, and so on. One simple Recycler may do the trick. Then there are the other operational costs like electricity, plumbing, etc. All of these will benefit from a smaller footprint. 
  4. Availability– When you go small, your availability options for a viable Micro Branch can increase dramatically. An existing retail space, whether it is a stand alone or storefront, could theoretically break up into at least two. The financial institution could be on one side and hopefully a symbiotic retailer taking the other. Additionally, a smaller footprint can allow for placement in shopping centers or busy intersections where traditional retailers simply cannot go. From small pads or even space allotments in a parking lot, there could be room for a small shop. If Starbucks can place a shipping container style shop in a parking lot, so can you.
  5. Brand Expansion – The final upside to thinking small is the big uplift for your brand. The more that your brand is placed around town, the more presence you will have. The more presence you have, the more brand recognition you will gain. 

Thinking small can allow you to expand faster, more economically, and allow you to outcompete others in your area, many of whom may not be able to or willing to. 

Next week, we’ll discuss other really big small concepts like Storefront, Tellerless and Pop-Up Branches.

If you want to learn more about ways to go small and how you can implement a varied Hub & Spoke model, Contact Us today.