Creating and building a business is a big deal. Expanding your business out of state . . . that’s a whole new ball game! With the responsibilities of an operating business already on your plate, it can be difficult to find the time to plan, strategize, and analyze your way to a successful expansion.
But, expansion shouldn’t be a terrifying proposition. There are actually some basic steps you can take to make the process easier, more realistic, and more successful.
Establish long-term goals
This may seem like an obvious step, but many decisions to expand are based on unexpected opportunities. If your biggest competitor in the region offers to sell you her business then chances are good that you’ll at least consider the idea.
But, you can stay a step ahead of surprise opportunities by deciding on a plan before they come along. You should already have a long-term business plan in place, but a lot of people don’t – especially small business owner/operators.
Even if expansion isn’t a goal of yours, it would be beneficial to run through the possibilities in case a situation like the example above happens. Let’s say your store and Sally’s store are the top two competitors in your region. Sally decides to retire and puts the business up for sale, which allows chain stores the chance to get in on the market and maybe even take customers away from you. Buying Sally’s store becomes more about survival than expansion, in which case being prepared will be of great value. Going through these possibilities is valuable whether your hope to expand or not.
Perfect your current business model
If you’ve experienced enough success to consider expanding then you probably feel confident that your business model is in good shape. But, the truth is that many times businesses are actually set up to rely on community to succeed instead of a solid system of functionality.
If you own a business, the chances are good that you own it in your hometown. This allows you to start with the support of your family, friends, neighbors, and other folks in the community. But, this isn’t the case when expanding across state lines. You’ll be establishing your business in front of people who don’t know you, what you’re about, and why they should trust you.
Having a foolproof business model is the key to improving your chances of succeeding in a different location. A great way to develop such a machine is to start stepping away from your business to see what happens. This might be impossible for some, but if at all feasible then it should be highly considered.
Are you making all the sales or seeing all the appointments for your current business? If you are and you won’t be extending that same service to the next location then you’ll want to be sure that whoever is handling it can manage the responsibilities. Better yet, you’ll want to figure out what it is exactly that has allowed you (other than your network) to be successful.
Choose a market
Going back to the example of Sally’s store, it may not always be possible to actually choose what location you’ll be landing in. But, that doesn’t mean you can’t choose the correct market. Sally may have failed because she was targeting only women and no men, even though the men in her territories could use her products.
Do your market research to find out where your business can operate most successfully, or how to make an existing business more appealing to the market in the area. You’ll also want to pay attention to local and state regulations, taxes, etc. All cities and states have their own policies and some will be more kind to your business while others will be less compatible.
Another way to do market research is to examine existing competitors or similar businesses in areas you’re interested in doing business. There are few better ways to get quality information than finding out what’s working and what’s not working for a business. If you’re expanding then you probably have insights from your own business, but it’s helpful to see what others have done and how it has worked out from them.
You don’t have to learn only from your own mistakes – check Facebook, look at websites, walk in stores – get out there and see what everybody else is doing and use it to help develop a better plan for your own ventures.
Add local professionals to your team
If you’re expanding your business across state lines then chances are good that you’ll be hiring new people as well. One way of giving your new expansion business is to hire professionals that have lived in that area. For example, one of the first steps when establishing your business is to hire a Registered Agent in the state where you’ll be operating. Your agent can be a great connector to other businesses and leaders in that area. Just be sure you offer value first before you start asking for referrals. The easiest way to “get” is to “give.”
Adding local professionals will be especially important if your current business has thrived off of networks that you’ve created. As we’ve discussed, you won’t be able to leverage your connections in the new area, but you can leverage the connections of others.
Get to know candidates for the new business and make sure that you also familiarize yourself with the whole community so that you’ll know if candidates will really be able to offer a similar experience as the one you’ve created with your hometown.
Expanding on a successful business is exciting. Taking your work beyond state borders could create security in your existing business or it could just be the start of an empire. Whatever your goals, opening a new location out of state takes just as much effort as the first business you opened and then some.
Be sure that you know where you’re headed before you take off down the path. Also, make sure that the business plan you’re executing is the right fit for the new venture; just because it worked before, doesn’t mean it will work somewhere else. Become extremely aware of the intricacies of the market you’ll be involved with; whether you’ll be there or not, appointing professionals who are familiar with the lay of the land will help pave the way to a successful addition to your business portfolio.