Question

Topic: Research/Metrics

How To Choose Which Us States To Expand Into?

Posted by Anonymous on 8/1/2008 at 3:50 PM ET 250 Points
One of my clients sells very technical services to a subsection of contractors - they've had great success in their home state and are looking to expand into 6 other states in the first step of their expansion plan.

I've been asked to advise them which states to expand into. I'm planning on researching the following and just wanted to check w/you experts to see if I'm forgetting any other factors I should consider/research.

1. Availability of friendly channel partners in target state.
2. States that are relatively warm in winter (so that construction jobs will be plentiful)
3. Highest amount of non-residential construction spending within each state (lots of job opps)
4. Activity of industry associations by state.

Am I forgetting anything? Thanks in advance for your help!


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RESPONSES

  • Posted on 8/1/2008 at 4:09 PM Accepted
    Two other issues worth exploring -

    Aside from the current competitors, I think you'll want to look at the existing competition to see where your client could potentially develop the strongest advantage. It's not just a matter of identifying who the competition is, but what they are doing/how they are promoting themselves/what positioning they are using. How will your client differentiate itself?

    Second, you'll want to look at state and local regulations to see if there is anything that could potentially weaken your client's efforts.

    Good luck!
  • Posted by Levon on 8/1/2008 at 5:02 PM Member
    State taxes, political climate and general regulation towards construction, competitive landscape, weather beyond basic climate (rain vs humidity vs desert vs type of natural disaster prevalent in region), growth, local economic conditions and indicators, new builds vs renovation vs foreclosure.
  • Posted by Jay Hamilton-Roth on 8/2/2008 at 10:06 AM Member
    New construction hires.
    State-based construction organizations (events, magazines, builder's chapters, etc.)
  • Posted on 8/2/2008 at 11:20 AM Member
    Is the availability of labor (union/non-union/right to work state) an issue with this company?
  • Posted by Frank Hurtte on 8/2/2008 at 11:39 AM Member
    I dont know the extent of the technical services provided by your client. But, if any of it can be construed as Engineering, there is one more point that needs to be explored. The Certification, Registration of a Professional Engineer with that state. Several of the southern tier of states have laws which require Licensed Professional Engineerings be Certified with their state. And, it is not something that automatically crosses state lines...

    I have a couple of suggestions to get you moving in the right direction. Contact me via my profile if this is an issue.
  • Posted by Emma Cope on 8/3/2008 at 7:33 PM Member
    Ensure their processes are streamlined to the point of complete efficiency. Are they using up all their time 24x7 in the one state they are in? If so, something needs to change so that state expansion has a chance at success.

    So, while researching which states to expand, it's worth advising them to look inward to ensure they are ready to handle the volume.
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