How To Expand Your Business in Another State?

Successful small business owners want to expand their companies. It's part of their entrepreneurial DNA to want to grow their businesses into something bigger than what their brand is now. Small business expansion includes several strategies, from attracting new customers to encouraging loyal customers to purchase more products and services from your company. However, one way to grow your business does not receive as much publicity: How to expand your business in another state.

If you own a floral shop in St. Louis along the Mississippi River or operate a grocery store adjacent to the Ohio River in Cincinnati, there are thousands of customers waiting to do business with you in Illinois and Kentucky. The problem is most of the customers do not want to make the drive across a bridge spanning the two mighty rivers.

This means you should consider bringing your business to their state.

This is a sponsored conversation written by me on behalf of CT Corporation. The opinions and text are all mine.

Analyze What You Need to Grow

Not every business model is set up for expansion success. You have to determine if you have the financial resources for the construction of another shop, store, or office. Then, you must decide if your business model can handle the addition of numerous employees. You might have to tinker with a business model that works for 20 employees, but does not accommodate the doubling of the workforce to 40 employees. Business owners must meticulously plan for expansion to reap the benefits of higher sales and profits.

Permits and Licenses that Work in another State

Fifty states mean fifty different sets of business laws and regulations. For example, electricians in California need a state issued contractor's license to work. In Indiana, an electrician who possesses similar professional credentials as what the California electrician possesses must go through county or municipal governments to receive a contractor's license. CT offers the resources to help business owners make sense of the different permits and licenses required by the state where they want to expand.

The Importance of the State Tax Connection

Although the tax rate of a neighboring state where you want to expand matters for business operators, what matters more is the legal concept called "State Tax Nexus." As the fancier way to say sales tax connection, a state tax nexus represents the link a state proves that requires businesses to collect state sales taxes. CPA Sylvia said in a recent interview that "States are enacting laws which aggressively define what activities create nexus to their state. State tax officials are also aggressively interpreting and enforcing these laws." Establishing a state tax nexus can involve one independent contractor or a regional sales team.

Should You Foreign Qualify?

Despite its global implications, foreign qualify refers to a business registering with the new state, which makes the business follow the new state's laws and regulations. Businesses that foreign qualify enjoy several benefits that include legal protections and avoiding large fines for violating state law. You can also decide to incorporate your business or create a limited liability corporation (LLC) in every new state you choose to expand your business.

Understanding State and Municipal Laws

Every state mandates minimum wage laws that meet the minimum wage threshold of the federal government, but can also exceed what the federal government declares for its minimum wage standard. For example, the minimum wage in Missouri is $7.85, while Illinois mandates a minimum wage of $8.25. You also have to deal with different zoning laws and discrimination regulations. Attorney Barrie Gross says, "Employers must comply with all federal, state, and local laws that are applicable, even if the laws have different legal standards. Sometimes, that means employers need to combine the laws and apply the provisions of each that are the most favorable to the employees.

You have one more factor to consider when planning how to expand your business in another state. You can implement the best local SEO practices to motivate residents of another state to cross state lines and visit your business, or even better, present a call for action that prompts potential customers to buy your products online.

This is a sponsored conversation written by me on behalf of CT Corporation. The opinions and text are all mine.