Buying a business overseas or in a different location can be a powerful growth, diversification and risk management strategy. The best industry in which to buy a business depends on your expertise, risk tolerance and location preferences. Different countries may have advantages your country does not. Buying a business within a different territory or state can also present large-scale business opportunities within your country.
However, this move requires careful planning and due diligence. Understanding the benefits and potential challenges ahead can help you make informed decisions. While all of this depends on your specific industry and buying situation, there can be many benefits to buying a business in another location.
Whether you are doing a vertical or horizontal merger, having a business in a different location can come with certain benefits. Entering your business into a new location increases your customer base and connections with other businesses, such as potential suppliers, partners and business owners. It can also automatically increase your market reach. You will be able to continue to grow that customer base in a new location, helping sell your product or services more effectively in the new area.
Additional reasons to consider this investment include:
While buying a business in another state or country can be a lucrative investment, it also presents several challenges that can turn the opportunity into a costly mistake if you do not plan carefully. A well-established supplier network may not transfer to a new owner so easily. There are also shipping and import costs to consider. International businesses face customs regulations, tariffs and logistics challenges that can increase costs. From legal complications to cultural barriers, here is a deep dive into the risks and downsides.
When you purchase a business in a different state or country, you will have to deal effectively 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. There are many ways to manage the distance between businesses.
Managing a new business remotely becomes challenging due to a lack of hands-on oversight, time zone differences and language barriers. These factors can lead to slow decision-making. 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.
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. Company culture is different no matter where you purchase a business. How can your business ensure the different cultures work well together? You can take three primary approaches to meet the company culture challenge head-on:
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.
Each state and country has unique business laws, tax structures and regulations. Failing to navigate them properly can lead to fines, legal troubles or even the inability to operate. For example, you may need to register your business as a foreign entity in another state, which means additional paperwork and legal fees. There are also industry-specific regulations. Health care, construction or finance organizations have state-specific licensing requirements in the U.S.
Some countries have strict foreign investment and ownership rules, requiring local partners or government approval. You may also face double taxation if your home country and the business’s country do not have favorable tax treaties. Finally, there are intellectual property challenges to consider. Trademark and copyright laws vary by country, making it harder to protect your brand internationally.
There can be language barriers if you buy a company in a different country. If this is the case, it may be best to manage the two locations as separate businesses that work in partnership toward 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.
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 the benefits of buying a business in another state would 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, who is fresh, pick up that load and take it to its final destination. At that point, you could also purchase a transportation logistics company.
Several domestic industries are consistently profitable, ensuring you will see a steady revenue stream within our borders:
Just like buying a business out of 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.
There are several popular options to consider if you want to expand your portfolio globally. They include:
While there are several benefits to buying a business in a different location, it also comes with some risks. Before you decide on your next company purchase, consider these factors:
Before you buy a business in a different location, it is important to do your research. Consider the local demand and competition, regulations and taxes, and economic or demographic trends. You want to opt for a business in a growing area where there will be a long-term demand for your product or service. For example, if you want to buy a restaurant, research the local food scene. Are people dining out often, and what cuisines are in demand? Are there restrictions on liquor licenses?
A broker can help you find the right opportunity and offer sound guidance through negotiations, legalities or other nuances. They will assist with due diligence, investigating financial statements, legal liabilities, customer or vendor relationships, and employee agreements. If you are happy to proceed, secure financing and negotiate the terms of sale. The process is similar to buying a local operation, with a few additional considerations to keep in mind.
Buying a business in a different location can unlock significant growth opportunities, from reducing risk through geographic diversification to gaining access to new customers and talent. However, your success depends on thorough research, strategic planning and the help of the right business broker.
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 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. You can read our customer reviews and the companies we’ve sold for more information about us.
