Taking the leap from Grayson St. to the Pearl was significant for Charlie Biedenharn when he and his partners expanded Bakery Lorraine. He talks about how hiring sufficient staff was the most difficult part of scaling up.
Take your business to the next level by opening a new location. Make sure your marketing plan is up to date and your finances are in
Preparing for a New Market
1. Update your marketing plan
Consider your target audience, sales plan, and competitive advantage relative to your new location. Total extra marketing and sales costs, and use SBA’s SizeUp tool to compare your business to competitors in the marketplace.
2. Review your business finances
Create a projection report that showcases your cost and revenue estimations for your new location. Consult your balance sheet to see if you’re able to afford your expansion costs, and if not, you’re on the quest for more funding again.
3. Secure licenses and permits
Your new state, county, and city governments may insist you get a new license or permit. Check the state’s website since legal requirements vary between states. Verify you can legally operate in a new state through the issuing agency if you already have a federal license or permit.
4. File for foreign qualification
Start by submitting a Certificate of Authority to do business in the new state. Some states also require a Certificate of Good Standing from your original state. Learn about any applicable foreign qualification fees through the state offices.
5. Pay new taxes
As a foreign qualified business, you’ll pay taxes and annual report fees in both your new and home state. Not all states have a sales tax, and some have particular tax exemptions on items like clothing or food.
Expanding Through Franchising
Grow your business by buying a franchise, or building one of your own. Like buying an existing business, purchasing a franchise can cost you more beforehand, but is also less of a risk to you than building something from the ground up.
Your business may be the ideal candidate for franchising if it fits the following criteria:
- High-quality product or service appeals to potential business owners
- Operations are easy to teach
- Business is easy to reproduce in new markets
Merging & Acquiring Businesses
Before finalizing a sale, figure out how much the other business is worth by going through the valuation process. Now, you can put a sales agreement together to authorize the purchase of the corporation’s assets or stock. Check that all assets and liabilities are noted in detail so you’re not faced with any issues post-sale.
Business Funding Tip
Consider SBA financing to maximize leverage with extended terms as a new location ramps up its operations and cash flow.
Registering as a Federal Contractor
The U.S. government is legally required to supply small businesses with contracting opportunities, and the process is a fairly painless one.
1. Get registrations and ID numbers
These include a Dun & Bradstreet (DUNS) number for each of your physical business locations, and a North American Industry Classification System (NAICS) code to categorize your business according to the product or service you provide.
2. Meet size standards
The SBA assigns a size standard to every NAICS code. Use their Size Standards Tool to see if your business qualifies as a “small” business.
3. Register with SAM
The System for Award Management (SAM) is a free federal government database that government agencies use to find eligible businesses for contracts.
4. Maintain compliance
Be sure to obey all federal laws and regulations. Individual organizations may have their own rules, but The Federal Acquisition Regulation or Defense Federal Acquisition Regulation Supplement are relevant to the majority of federal agencies.
With almost 96% of consumers living outside of the U.S., you may want to take advantage of foreign purchasing power by exporting your goods. Take the following steps to initiate international trade, then take SBA’s free 30-minute online course:
1. Evaluate whether your business is ready for exporting
2. Learn about the market
3. Build an e-commerce presence
4. Arrange for financing and insurance
5. Take part in a trade event
6. Reach out to buyers or distributors
7. Familiarize yourself and comply with trade rules
8. Resolve trade issues
9. Get local professional guidance and training.
Ready to get started? Click below to download your Build Your Business Blueprint.