The 3 Best Ways to Expand Your Business into a New City

If moving house is the second most stressful undertakings in a person’s life, expanding a business to a new city is the first. You already know that you can’t just copy and paste what you’re doing in your current city into the new city—it doesn’t work that way.

While the differences between your current city and the new city might not be as stark as the difference between LA and New York, every city is a little bit different, and the demographic there might not respond to your business the same way to people in your current city are.

Each city is its own microcosm of culture and even two cities with the exact same demographics will have different cultural tides.

Figuring how to expand your business, keeping its core in place, while also making room to adjust your model as needed for the new city, can be difficult and daunting.

But, never fear, we’re here to help. Here are three of the best ways to expand your business into a new city successfully:

Acquire a Competitor

Say, for example, you are based in New York City. You see a small company in Philadelphia doing essentially what you are doing, for their local buyers. They’re still a startup and you’ve got some capital. You’re interested in expanding to Philadelphia. So why not buy their business (if it’s for sale, of course)? There are a number of benefits that go along with just buying a company that is already established.

First, they’ve already done the market research for you. They know what works and what doesn’t work in their city. They know how people are going to respond to certain personas and products. Second, they already have a location.

Even if it’s not the very best location in the entire city, they probably already have some assets there that can be moved to a better location if you find one.

And let’s not forget about talent—if you were to simply try to open up a new office in a new city on your own, you’d have to hire all new people. Sure, you might be able to send one of your best managers over there to hire, train, and set up the new branch of your business, but that can be time-consuming and expensive.

When you acquire a competitor, the company comes pre-loaded with people that already know the business. You might lose a few people in the acquisition, but those who are good at the job and are already skilled at doing it will stay on to help you make money.

Buy a New Location

If you’re not interested in acquiring a competitor and, instead, just want to uproot one section of your business and pop is down in another cit

y, you can definitely do that. It’s a good idea, however, to spend some time researching different areas of the city. You might be an IT company, but that doesn’t necessarily mean you have to set up shop in the tech district. In fact, you might find that you’re much better off not doing that.

There are a number of benefits to taking this tactic, too.

For example, if you’ve gotten a number of requests for your products or services in a city, you already know that there is demand for your business in that city. All you have to do is show up, and you’ll have customers built right in. Building a second location of a business you’ve already established is much, much easier than building an entirely new business.

Keep in mind, however, that you will need to put some time into adjusting your business model for the new location.

Even after your managers open and bring the branch up to speed, they might have more autonomy than your first location, simply because the CEO is there less often. Make sure you have the systems in place to handle the challenges that naturally come along with opening a second location.

Grow Your Business First, Then Divide

Just like a cell divides, it might be more beneficial to first grow your business here at home, and then, when it has become too large to have in just one location, split it.

Why is this beneficial to your company? Because it allows you standardize operations, improve your team, decide who needs/wants to move, and make sure that your business is stable enough to split off into a new city, before you’ve actually invested capital in the movement itself.

It will also include a number of important tasks, like incorporating or becoming an LLC, either of which are important steps to take if you are going to take on debt while opening up in a new city.

This option is a litmus test for whether or not your business is actually strong enough to support an expansion to a new city. If you have the clients, customers, and capital to make the expansion worthwhile, then do it.

If you find that you are not able to attract the clients or customers that you need in your new city to make opening there a good idea, then you haven’t invested too much to pivot and choose a different location.