A new location is a major commitment of time and money with the potential to expand a company’s business and increase profits. New locations also come with risks. Sales may be lower than expected while costs are higher. The new location may pull more resources from existing operations and strategy than anticipated. Could we have better anticipated this?

In this course, We:

  • Explore some of the key financial considerations when opening a new location.
  • Describe how to project common revenue and expense items for a new location.
  • Explain how to build a net contribution and cash flow forecast.
  • Illustrate analysis methods like breakeven analysis and scenario analysis.
  • Demonstrate scenario analysis and sensitivity analysis with Excel’s Goal Seek, Scenario Manager, and Data Table functions.
  • Define common metrics like NPV, IRR, and Time to Breakeven. I’ll show multiple ways to analyze this in Excel. For Excel gurus, you can do this yourself. For others, this gives you an idea of what an accountant, analyst, or consultant can do for you.
  • Reveal common decision mistakes people make when analyzing new locations and how to avoid these mistakes.

This course is focused on the financial analysis of the location and how a new location fits financially into a company’s larger strategy. Some things I don’t cover or don’t cover in detail in this course:

  • Merger and Acquisition (M&A) Analysis
  • Analyzing where to locate the store or new location
  • Detailed financial accounting entries and financial statement disclosure
  • Tax considerations and treatment. I will briefly mention some relevant tax items like cost segregation studies

Course Key Concepts: Capital budgeting, Capital planning, Budgeting, Net contribution, Scenario analysis, Breakeven analysis, Sensitivity testing, Behavioral finance, Net Present Value (NPV), Internal Rate of Return (IRR).

Note: This course is also available in Text Based format. https://www.illumeo.com/courses/analyzing-whether-add-new-locations-capital-budgeting-text-based-course

Learning Objectives
  • Identify key revenue and expense items for a new location analysis.
  • Recognize sources of information for new location projections.
  • Discover and recall analysis metrics like Net Present Value (NPV), Internal Rate of Return (IRR), and Time to Breakeven.
  • Recognize Excel What-If functions like Goal Seek, Scenario Manager, and Data Tables.
Last updated/reviewed: October 10, 2023
1 Review (12 ratings)


Member's Profile
Lots of information and good considerations for this type of analysis.

Course Complexity: Foundational
No advanced preparation or prerequisites are required for this course.
Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
  Overview to Analyzing Whether to Add a New Location3:12
  Are You Ready To Grow7:50
  Profit Or Cash Flow Analysis5:16
  REVIEW QUESTIONS: Profit or Cash Flow Analysis?quiz
Revenues and Expenses
  Estimating Revenues11:42
  Buying Or Leasing The New Location12:06
  Building Loan Considerations5:38
  REVIEW QUESTIONS: Expensesquiz
  Net Contribution And Cash Flow Analysis12:14
  Modeling Scenarios With Scenario Manager6:42
  Break Even Analysis10:43
  Using Excel Goal Seek For Break Even2:48
  Two-Variable Analysis And Beyond9:38
  Analysis Metrics8:48
  Avoiding Decision Mistakes10:52
  Key Takeaways10:50
  REVIEW QUESTIONS: Key Takeawaysquiz
  Analyzing Whether to Add a New Location - Capital Budgeting2:09:48
  Slides: Analyzing Whether to Add a New Location - Capital BudgetingPDF
  Analyzing Whether to Add a New Location - Capital Budgeting Glossary/IndexPDF
Course Resources
  Business Growth ChecklistPDF
  Industry Research ReportsPDF
  Ways to Project NumbersPDF