How to Expand Your Business into Other States
16 May, 2016 / Comments: Comments Off on How to Expand Your Business into Other States / By William Mahnic
Expanding your business into other states is an exciting, yet overwhelming time for your business. If you are ready to expand into other markets, it likely means that your business is doing well and expanding will give you the opportunity to increase your exposure and ultimately your sales. The important factor is that you go about the process the right way or your plan could backfire on you, hurting your current business. Here are a few ways to get your business into other states, both near and far with success.
Know the State Limitations
Every state has different requirements for businesses, so it is very important that you consult with each state’s representative in order to determine what you have to do differently in each state. This is especially important if your business will require any type of licensing. If you are not sure about where to start, the Small Business Administration can be a great place to consult. If you do not take the time to determine what your business requires in a specific state, you could end up with penalties and fines that make it hard to make a profit. Any business, whether it is a trade service or otherwise, should determine what the state requirements are before choosing to expand.
Know the Tax Laws
Every state has different tax laws in addition to the business regulations. It is important to understand those regulations so that you can avoid penalties. If you have employees, the tax laws are even more important. There are not only state tax laws to abide by, but also local laws that you must understand. Things like minimum wage and employee discrimination are amongst the things you will have to understand for each state in order to be safe. Talking with an accountant in the state you wish to operate can give you the best starting point in each state.
Determine your Target Audience
It is important to take the time to determine if your target audience even exists in the state you wish to expand into. While you might have great success in the current state you operate in, another state might have a completely different audience that might or might not be good for your business. Check the local market to determine if you will have enough of an interest in any particular state. This is an area where plenty of research ahead of time is necessary in order to determine if it is worth it to expand into that state.
Have a Plan
Your business plan should be amended to include the various states you wish to expand into. This plan should include exit strategies, ways to modify your business to meet the needs of each state, and specific goals to help keep your business thriving. Even if you have a successful business plan in the state you currently operate in, you will need an amended plan for each state you expand into and be willing to be flexible with your business model in each state.
Align your Staff
The staff that you will hire will have a large impact on your business. Do you want to hire all brand new staff for the new branch or would you rather have experienced staff help get things started? This is another place where you need to have a written plan in order to determine what is right for your business. You might want to use current staff to get things started and then hire new staff after things are settled or you can just start brand new from the beginning.
Expanding your business into other states is a great sign that your business is doing well, but if you go about things the wrong way, it could be the one thing that brings your business down. If you are unsure about how to handle moving your business into other states, consult with the Small Business Administration to help you get started. They have the resources necessary to help you with all aspects of your business expansion from researching your target audience to understanding the tax laws in each state.