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Pros & Cons of Purchasing A Business In A Different Location

Pros & Cons of Buying A Business In A Different State Or Country

If you are looking to buy a business, you should consider purchasing a company that is located in a different state or country. Different countries have a variety of advantages that your country does not. Additionally, within your country just buying a business within a different territory or state can present large-scale business opportunities.

Pros & Cons To Purchasing A Business In A Different Location.

While all of this depends on your specific industry and buying situation, there can be many benefits to buying a business in another location.

The Benefits Of Acquiring A Business In A Different Location

Listed below are a few benefits to purchasing a company that is located in a different state or foreign country. Whether you are doing a vertical merger or a horizontal merger, having a business in a different location can come with certain benefits.

  • Widen Your Market Reach: Purchasing a business in a different state can automatically increase your market reach. Not only will you have access to your business’s customer base, but you will be able to continue to grow that customer base in a new location. Your physical presence will help to sell your product or services more effectively in the new area.
  • Tax Benefits: Making transactions in certain states or countries over others can give you benefits in taxes that can save your business large sums of money. Conducting business in a foreign country comes with a mixture of tax benefits and challenges. Knowing state requirements and cross-country requirements for business taxes is important to make the foreign business you acquire optimally.
  • Increased Business Connections: Entering your business into a new location not only increases your customer base but also increases your connections with other businesses such as potential suppliers or partners, and business owners. Connections within a business are what can lead to large-scale growth from partnerships in the future.

The Negatives Of Acquiring A Business In A Different State

If you purchase a business in another state there are definite drawbacks. Below are three of the negatives to buying a business in a different location and ways you can prepare or take countermeasures.

Dealing With The Distance Between Your Company’s Locations

When you purchase a business in a different state or country you will have to effectively deal with the distance between companies. You could purchase a personal plane or jet, get a frequent flier credit card or even get a small home at the other business’s location. But one of the things we have learned during the pandemic is that many things can effectively be managed remotely. There are many ways to manage the distance between businesses.

The main thing you should consider is when you purchase a business in another location, you might be traveling more initially to make sure everything is going smoothly. 

Dealing With The Difference In Company Culture

Company culture is different no matter where you purchase a business. It is also important to know that have a different company culture is not inherently a bad thing. If you have traveled more than an hour’s distance in the United States, it becomes extremely obvious that there are different cultures county to county, state to state, and country to country. Buying an existing business in a different state or country is likely to have its own culture.

What actions can your business take to make sure the different cultures work well together? There are three primary approaches you can take to meet the company culture challenge head-on. You can try to balance the two cultures and keep them separate, mesh the two business cultures together, or you can try to overtake one location’s culture with the other location. It is not recommended to go with the last option too quickly and this is usually only done when necessary if one culture just isn’t working well. All of these have their own challenges and difficulties and each of them has its own benefits.

First, you should communicate with your existing company that there may be some adjustments to make so that the two locations work well together. If your employees are aware of the potential challenge they will be prepared to handle the work culture divide. Communicate it with the business you purchased for the same reason.

Take some time to familiarize yourself with the two cultures before defining how you will approach handling them. Over time the differences in your business locations could make your company flourish. After all different locations can learn from each other as to what has worked well and what hasn’t. 

Dealing With The Language Barrier Of Buying A Business In Another Country or State

If you buy a company in a different country, there can be language barriers. If this is the case it may be best to manage the two locations as separate businesses that are working in a partnership towards a common goal. Managing the two companies this way will put you in a position of delegation. Delegating leadership to a native speaker will help in the management of a company that is in another country.

What State Should You Buy A Business In?

Buying a company in a different state depends on the industry you work in and the different benefits that a state offers. Ask yourself, where would the benefits of buying a business in another state be most beneficial. Is there a different business location that is closer to a supplier or your target audience? A deep-sea fishing company in the United States could probably buy a location on the coast of North Carolina or New Jersey, but not in the heart of Missouri.

For instance, a transportation business located in Maine might want to purchase other transportation businesses in Pennsylvania, Tennessee, and Texas. Having these locations for your business will be an advantage for your company. If you work specifically within trucking companies you can avoid certain driving restraints by having one driver drop off their trailer at a location and another driver, that is fresh, picking up that load and taking it to its final destination. At that point, you could also purchase a transportation logistics company.

What Country Should You Buy A Business In?

Just like buying a business in a different state, you should do research in your personal industry on what location is most beneficial for you to expand to. Buying a business in a different country comes with a lot more challenges than buying one within your own country. Buying or selling an international business should be done through a professional business brokerage firm.

How To Acquire A Business From Another State

If you would like to buy a company in a different location, we have different types of businesses for sale that are located in a variety of locations throughout the United States. Buy a business in another state or country through Synergy Business Brokers. We sell businesses in NY, NJ, CT, MA, PA, NH, RI, VT, ME, MD, VA, DC, DE, TX, LA, TN, NC, SC, WV, KY, OH, DE, AR, AL, MS, IL, IN, NM, OK, MI, ND, IO, and MO. We look forward to speaking with you.

If you are interested in buying a company, please view our Companies for Sale.  You can sort by industry, revenue, state, and keyword. For more on us, you can read our customer reviews and the companies that we’ve sold.

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