Companies embarking on their first expansion might want to consider a satellite over a branch location. Here we tell you why and explain both terms.

If you’re confused by the differences between a branch and a satellite, you aren’t alone.

“What I see happen a lot in the industry, companies call what are satellite yards, branches,” says Bruce Wilson, consultant with the Bruce Wilson & Co. “The whole thing within the industry is muddled.”

But if you’re considering an expansion, it’s important to know the difference.

A branch office has a full staff—crews, a sales team, possibly mechanics, management and an administrative staff. It is led by a branch manager, who reports to the main office or headquarters, and it could operate independently of the main office, if it needed to.

A satellite, on the other hand, is merely a launching pad for crews. Satellites come in all shapes and sizes and don’t have a full administrative staff, if they have any office personnel at all. Sometimes it’s just a place to park trucks and equipment overnight.

Most importantly, a satellite is a great first step for those looking to cut down on drive time and up response time without the overhead costs of a full branch. Here’s why:

1. Relatively inexpensive: Without a full staff or, sometimes, even a brick-and-mortar facility, satellite yards require much less overhead than a branch office. Also, satellite yards vary in form. Some have a small office space for a designer or salesman dedicated to the coverage area. Others are fenced-in spaces where a company stores supplies and equipment. In Stamford, Conn., where land is scarce and expensive, Eastern Land Management, one of Wilson’s clients, has three small satellite yards, which aren’t much more than unused parking spots, around town. This keeps the company from having to move into a bigger space, which can cost more than double in rent. “With some of our satellite operations, we rent space from clients at large corporate centers for about $5 a square foot,” says owner Bruce Moore. “That’s just raw land—no building, just storage space, like a fenced-in lot.”
2. A good first step: Before taking on the overhead of a branch, a satellite yard is a good first step for companies looking to expand. It lets companies build revenue in an area before committing to a full branch, which shouldn’t come before a specific area is generating $2 million-$3 million in revenue, some say. A satellite is a good place to start because it’s easier to manage, says Jonas Pattie, co-owner of The Pattie Group in Cleveland, Ohio. “It takes less resources and less expense. And all the client is worried about is, ‘How fast are you in my driveway and how much am I paying in travel time?’”
3. Seamless communication: With improved communication technology, many companies elect to open satellite yards because they don’t need a full administrative staff in all locations. Colin Taheny, vice president of Ryco Landscaping in Lake in the Hills, Ill., uses smartphones, a GPS fleet management system and BossLM, a business management software for landscapers. “You’re now able to bridge a lot of the administrative things, eliminate or reduce physical offices and spread out further with satellites,” he says.