It’s Time To Expand Your Business In Another City

Small business owners who want to expand their operations often don't know the best ways to go about it.

Originally Published Sept. 25, 2014.

Branching out geographically is a way to grow a business. But small business owners who want to expand their operations often don’t know the best ways to go about it. Duplicating current success in another market requires careful planning and execution.

BLACK ENTERPRISE surveyed the members of Young Entrepreneur Council, an invite-only organization comprising the world’s most promising young entrepreneurs. BE asked the collective, What is one do or don’t for expanding a business outside of your region, city or state? Here’s what the members said.

Do Leverage Digital Marketing

We do very little business in the city where we are headquartered, which means our marketing strategy is highly focused on referrals and inbound digital marketing. Rather than rushing out to hire local salespeople, focus on connecting with your target clients via online forums and industry-specific content. Then plan visits to connect in person with the connections you make via social media.—Mary Ellen Slayter

Do Commit to a Real Investment

If you’re going to expand into new regions, you need to calculate—and commit to—the real costs of this endeavor. Expansion can be an expensive investment; consider costs for business development, building a team, office space, etc. If you’re going to do it, you really need to do it, so make sure you can afford the expense.—David Ehrenberg

Do Be Present and Ask Questions

Simply travel and be present to get all your questions answered about expanding your business. Talking to other business owners by meeting industry people at networking events and getting insider information about that region allows you to make realistic decisions, which can save you money and time.—Firat Parlak

Don’t Expand Before Proving Your Model

It’s critical not to expand your business before you’ve proven it works in at least two locations. The process is: (1) Find something that works. (2) Replicate it. (3) Scale it. That is, if you are a local e-commerce website, start the business in your hometown. Prove it works. Next, replicate it in another city (preferably with different demographics). If it works, it’s time to scale it quickly!—Kristopher Jones

Do Join Networking Organizations Right Away

Assuming you have no connections or relationships in that business, go out and make them. Make sure you are not pitching yourself around to everyone, though; that’s a turnoff. Instead, ask yourself how you can provide value to every person you meet, and (genuinely) expect nothing in return. In the end, those who give more, end up getting more.—Adam Stillman

Do Use Your Network

We recently launched an Influence & Co. office in New York, and one thing we did right before the launch was reach out to anyone we know who is in New York. We asked for advice on where our VP launching the office should live, where he should work out of in the short term, and who he should know. He already had a community of support when moving out there, which made the launch a lot easier.—Kelsey Meyer

Do Have a Talent Strategy

When expanding into a new market, you need a talent strategy. This includes (1) an operational understanding: local laws, regulations, tax implications, and salary data for the market; (2) a growth plan: Candidates will want to understand your plans for expansion and what it means for them; (3) a hiring strategy: a plan to determine how you’ll attract, interest, and persuade candidates to join you.—Susan LaMotte

Do Get to Know the Area and Its Demographics Well

It is imperative that you get to know the area you are moving into and the consumer habits you are trying to attract. While this may seem obvious, many people forget to do that and move into the wrong areas, and market to the wrong people. Another crucial aspect is to remember that people tend to have pride in their cities, so speak to them as if you are one of them, not coming in from above.—Samira Far

Do Hire Locally

DO make a local hire. Your representative on the ground must be steeped in the “climate” of that region—cultural, political, social, etc.—for two reasons. They must relate to their job relative to the local environment and feel its pulse—especially with a new expansion.Also, you don’t want to couple someone’s move with a new job. Those are two life stressors at once, and therefore best to avoid!—Jennifer Blumin