7 Ways to Prepare for Moving Your Business to Another State
April 7, 2022 | Last Updated on: July 27, 2022
April 7, 2022 | Last Updated on: July 27, 2022
In this article, you’ll learn 7 ways to prepare for moving your business to another state including:
So, you want to your business to another state. You know that there’s a lot to be done, but you might have some questions about what exactly goes into the relocation process.
To increase the likelihood of a smooth transition, you need to spend time on preparation.
Here are 7 ways to prepare for moving your business to another state:
Do you operate as a sole proprietor or a limited liability company (LLC)?
There is no formal action required to form a sole proprietorship, so you don’t really have to worry about state registration if you are a sole proprietor who is changing states.
If you have an LLC, on the other hand, your business entity is registered in your current state. This means that if you change states, you have to take action.
There are a couple of possibilities.
A foreign qualification is a good option for small business owners who want to maintain a presence in their old state – even after the move to the new state is completed. By filing a foreign qualification, you inform the new state that you’re going to be registered in multiple states.
Are you planning to stop operating in your current state? If so, you may want to dissolve your LLC in your current state and register it in your new state. Through articles of dissolution, you can inform your original state of your change in status. It’s very important to complete this step so that you don’t put yourself on the hook for business taxes and penalties in the future.
You also need to register in the new state, but fortunately, it’s not too difficult to set up and maintain an LLC. With that being said, you should talk to a lawyer if you’d feel more comfortable with a professional’s assistance.
Your local and state licensing requirements depend on your location and type of business. This means that as a small business owner who is changing states, you’re going to have to research the new requirements.
Here are some common local licensing requirements:
Here are some common state licensing requirements:
This is a quick overview of common local and state licensing requirements – check out our guide on what licenses you need to run a business for more information.
You might be able to keep some or all of your current employees if you move your business to another state.
If you have remote staff, it’s going to be a lot easier to keep them on board, but it’s also possible to convert in-person staff to remote staff if they don’t need to physically be on-site to fulfill their duties. And small business owners who are moving to a new location that is within driving distance of the old location may have employees who are fine with commuting.
That said, you may have to let go of some employees. There’s a right way and a wrong way to lay off employees. The right way is you give them a few months – or more – advanced notice, so they have time to look for a new job before the business move happens. The wrong way is to let them know at the last minute. By being prepared, you can do this the right way.
What if you need to hire employees in your new state?
You should start by looking at the local hiring laws – they may be much different from the laws in your home state. Here are a few things that vary state-by-state:
You should consult with a lawyer on local employment laws, as the cost of the consultation is likely to be far less than the cost of running into trouble down the road.
If you have an e-commerce business, you might not have to physically move anything across state lines when you move your business to another state. But if you have a brick-and-mortar business, coordinating the move is going to take up a lot of time. You may have to move inventory, equipment, and office furniture to your new address.
You have to decide between hiring movers and doing it yourself. This decision should not be made lightly, as moving expenses can be high – particularly for long distances. You’re going to pay a lot more to move from New York to California than you’d pay to go from New York to New Jersey. In addition, it’s important to find a moving company that is going to handle your business assets with care.
The importance of getting quotes from a handful of moving companies and reading online reviews cannot be overstated. You could potentially save a high three-figure or low four-figure dollar amount by choosing the right company – in moving costs and lack of damage to your things – by spending a few hours doing your due diligence.
You probably handle most of your banking from your phone, but this doesn’t mean that you can move to another state without doing anything from a banking standpoint.
If you have an account with a big bank, you should give your bank a call and see what has to be done – you might just have to provide them with an updated address and fill out a few documents.
If you have an account with a local bank, on the other hand, you should ask if they have physical locations in your new state. While you may not have to go to the physical location regularly, you could be required to come to a branch occasionally – and you’re not going to want to drive a long distance.
Want to close your account? You should do it before you change locations, as some local banks might make it difficult – or impossible – to do this remotely.
If you are moving a brick-and-mortar business to another state, you should adjust your marketing to target potential customers in the new location.
You can start by changing your old business address to your new business address on your website and social media profiles. It’s also a good idea to make social media posts on the major platforms announcing the move – ahead of time. By doing this, you can build up anticipation among your target audience in your new state.
Depending on your budget, you can look into certain forms of paid advertising – your options include social media ads, influencer marketing, television ads, and print ads. The best marketing channel for your small business varies based on where your ideal customer “hangs out.”
Your annual revenue and expenses are likely going to be much different after your business relocation – particularly if you have a brick-and-mortar business.
Let’s look at what impacts your financial projections for each category:
Your revenue is, as you surely know, determined by your number of sales multiplied by the average price of your offerings. After your change of address, however, one or both of these components might change a lot. Say you have a larger target audience in your new location – you may be able to project a higher number of sales. But if customers in the new location have less spending power vs. the old location, you may have to price your offerings at lower amounts. Your estimates aren’t going to match reality, but they are necessary so you have a general idea of what to expect in a different state.
While revenue projections are tricky, it’s probably going to be easier to estimate your future expenses. Here are a few costs to consider:
You need both time and financial expertise to project your revenue and all of your expenses – consider reaching out to a Certified Public Accountant (CPA) for assistance – they can help your small business beyond tax season.
It’s not easy to move your business to another state, but by being well-prepared, you can remove some of the difficulties and hit the ground running at your new location.
Need some funding for your new location?
At Biz2Credit, we provide straightforward funding made for your business.
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