When it comes to small businesses, growth is the magic word. Small businesses and start-ups are generally focused on growing at high speed. Expanding is always one of their goals, but in order to reach that goal, a lot of time and effort should be invested.
Expanding your business to another place whether it’s a nearby state or a central business district requires the same amount of effort you put in when you first set up your business. Yes, it’s not necessarily easier because you will be dealing with a new market with new regulations. To help you out, here are a few things you can do to prepare for the next move.
Is your business model capable of expanding to another city or another market? Is it even scalable? If your answer is no, then the smart move could be staying in your current state and working first on your business model. But if your business model is scalable and that you have the resources to expand, then you could now consider branching out.
Not all markets are the same. People in the state you are eyeing might have a different reception for your product or service. At the same time, there might already be an existing business similar to yours that will pose as a major competitor.
Like what has said a while ago, you need to research on the feasibility of expanding your business in much the same way that you did your market research when you first started out.
If you know that there are slight differences in the market in your next target state, then you can adjust your services and products to fit that market. However, this isn’t an easy decision. When it comes to changing your products, you have to look into its cost-benefit analysis. Will this move be more profitable or will it just give your business a big chunk of expenses?
Different states have different laws and in order for you to gauge how feasible expanding is, you have to take into account the legal regulations in that state. You want to know what kind of laws will affect your business and what their financial implications are. Say, for example, what are the additional taxes to be paid? What are the permits and how long will they take to be approved?
Because you will be operating in more than one place, you need a system that allows visibility for all the transactions, financials, and the daily reports. A problem small businesses face when expanding is the difficulty in managing from two different places. To avoid that, you might want to look into applications and systems that will allow you to access your businesses wherever you are.
Expanding a business to another state is not easy, but it can also be worth it. To know whether this move is strategic and profitable, you have to do the research and the projections to ensure that you will be making a well-informed management decision.