Once you’ve decided to expand your business, the next question is where? Should you stay local, try your luck in another state, or even another country? That answer depends on what stage you are in your business.
The simplest (and least disruptive to your current business) would be to expand regionally. There may be somewhere close by that’s not being serviced by your competitors. By going local, you can share resources and suppliers and be able to run both locations yourself. On the downside, there’s the old “Don’t put all your eggs all in one basket” theory. If your businesses are limited to one community, what happens when that community suffers from a bad economy, or if the big employer in town closes and all of your customers have to move away?
Still, you may already have your next location in mind. You’ve visited the area and believe the location will work. If it’s local, you’ll already know about the support your city or region offers. All the regulations and tax incentives are familiar to you. The quality and availability of employees is a known factor.
Let’s say you’ve conquered your region and are looking to expand to another state. That could mean a whole new demographic in customer and employees. But how do you choose where to expand next? One place to start is researching potential cities. Go to City-Data.com, click on a city, and you’ll find such information as gender population, stats on resident age, median household income, home prices, and more.
Next, look at the state government Web site. For example, the New York state site is www.state.ny.us. Here you’ll find lots of helpful information on doing business in that state, statistics on cities, information about any special tax incentives to start a business in a particular city, empowerment zones, and news on what the state is doing to help businesses succeed. Does the state look small-business friendly? Some states have pages on their Web sites dedicated to specifically helping small businesses.
Look for similar demographics to those that have made your current business successful. Or if you’re going for a whole new demographic, you can search for that. There are software programs available to help you find new potential markets. One helpful tool is an online business location service called ZoomProspector. Plug in information such as community type, population requirements, and labor force preferences, and the program will match you up with a range of potential communities and locations open for lease. One feature called “Find Similar Communities” allows you to input information about your current location, where you’ve had success, and gives you a list of similar communities. The Pitney Bowes MapInfo service does a similar service, and based on their expertise can use predictive analytics to help forecast success in potential locations.
Expanding your business to an international location can add value to your business, not only by increased worldwide exposure, but by allowing you to benefit from countries’ economies separate from what’s happening in the U.S. However, there are many factors to consider before making this big step.
- Will your idea transfer to the country where you are contemplating opening a location? Do your homework. Visit and talk to business owners, customers, and anyone that can give you feedback. Today, people everywhere have easy access to information on what’s hot and what’s not.
- Can you find the right person to run your foreign business? Check not only their experience in a similar business, but on their reputation in their own community. (More on hiring in “Hiring a Manager for your New Location”).
- What kind of tariffs and regulations are there? The Doing Business project provides information on business regulations, starting a business, employing workers, and more for 181 economies and selected cities, at the sub-national and regional level.
- The U.S. Office of Commercial and Business Affairs plays a major role in helping U.S. companies do business overseas. Start here to get your questions answered; then make an appointment with your local Small Business Development Office to get personalized advice.
Maria Valdez Haubrich is Chief Liaison Officer of GrowBiz Media (growbizmedia.com), a content and consulting company that provides information, advice, and resources to help entrepreneurs start and grow their businesses.