Introduction: Bringing the chickens home to roost
Two hours into the five-hour drive south from the Colorado border to my new home, I pulled into a rest area and popped the back door of my SUV. There in the back of my truck, fifteen chickens – fourteen hens and one surly rooster – stared crossly at me from the (thankfully) power-washable surface of a Tupperware container. I tried to project a consoling tone as I whispered, “It’s okay, it’s okay, we’re almost there.” The birds weren’t buying it. One of the hens let loose a long squawk, what I can only assume was profanity in chicken-speak.
It’s one of those lesser known issues: how do people with farms move their livestock when they want to move? I can’t exactly dump my wife’s chickens in a U-Haul or a FedEx envelope and hope for the best (although, strangely, I can send chickens through the US Mail).
It’s just as challenging to move a small business. There are a myriad of details to consider, from taxation, to intellectual property rights, to whether one should reincorporate the business in the new state, or even whether the move is a time for a strategic pivot for the business.
I want to take a look at moving a small business to New Mexico. My hope is that, by doing so, I can help you if and when you decide to move your small business – or open a new small business – in the state. While I am happy to share anything I’ve learned from this experience, I do have to add the caveat that nothing in this post should be considered legal advice, and that you should consult an attorney licensed in New Mexico if you need legal advice regarding your business. To find an attorney to help you, please click here for the State Bar of New Mexico.
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Where to Begin?
This article assumes the following:
- You already know the products and services you are going to offer (and you plan to roll out your minimum viable product first);
- You already know the profile of your ideal customer;
- You have conducted the necessary market research concerning where to find your ideal customer and who your competitors will be;
- You already have a pricing model for your products and services;
- You already have a business plan or lean business canvas in place for your enterprise; and,
- You already know the funding sources for your business.
If this isn’t the case, you should address these matters before moving forward. Don’t worry, though. I will come back to address them in later articles. In the meantime, you can address these issues by visiting the website of the Small Business Administration and researching there. In my case, I had already opened my business five years before my move to New Mexico and already had resolved issues like products and services, ideal customers, pricing, funding, and competitors.
Setting up the Legal Structure of Your Business
My first big issue: choosing an entity type to use for business in New Mexico. Because Tradecraft Writing is solely based on my marketing knowledge, skills, and ability, I chose to maintain it as a sole proprietorship here in New Mexico. Typically, when businesses are set up as limited liability companies (LLCs) or traditional corporations, this is done to limit the liability of shareholders due to corporate negligence or misconduct. This is not possible when an LLC or corporation has only one principal or shareholder, so there was little benefit for me to set up my business in New Mexico as a registered LLC or corporation. (Two notes here: 1. There are many other types of corporate structures possible in New Mexico, such as limited partnerships, professional corporations, limited liability limited partnerships, and so forth. Choosing the right structure for your business is a legal question that you should address with a licensed New Mexico attorney, not with someone like me in my role as a marketing consultant. 2. We can get pretty deep in the weeds, so to speak, with legal topics like “piercing the corporate veil,” corporate liability under the doctrine of respondeat superior, and other questions of how to protect a corporate shareholder from personal liability when their corporation is sued, but these are far beyond the scope of this article.)
Choosing a Business Name
There are three considerations when picking a name for your new business:
- Does the name work for your brand?
- Can you register your brand name with the New Mexico Secretary of State?
- Are there other businesses using this name as a trademark?
With regard to whether a name works for your brand, you have to ask whether the name helps you achieve your end goal: to sell your product or service (or at least doesn’t hinder your ability to sell products and services). I once heard of a retail food business that named itself after a particularly divisive political slogan (this works for either side of the political aisle, as I would never recommend someone naming a brand either “MAGA coffee” or “Takes a Village Tea”). I could not contain the repulsion I felt when I saw the brand’s sign in a strip mall. Why name a brand after a slogan that would alienate half of its potential customers before they stepped foot into the store? What does the slogan have to do with the product being offered? If someone doesn’t agree with the politics of the slogan, will they be treated poorly by the business? What happens if the political slogan is co-opted by a group of extremists, or the person who uttered the slogan becomes involved in a scandal; will the brand have to change its name?
I’m all for a brand being topical and even using shock or edginess to grab the attention of potential customers (look at how well this is done by Black Rifle Coffee Co.), but if doing so does not serve the end goal of attracting customers… what’s the point? At the very least, the brand name should not hurt one’s efforts. (I’m all for naming a burger joint “bloody ground up bovine carcass,” but I think “Five Guys Burgers & Fries” might sell better.)
Of course, none of this is relevant if the brand name is already in use locally. Business owners should research on the New Mexico Secretary of State’s website to make sure their desired brand name has not already been taken by another business or is so similar to another New Mexico business as to create a likelihood of confusion between the two.
Researching locally is not enough if you want your business to sell beyond the boundaries of the state. Business owners should make sure that their brand name is not already in use as a trademark by another brand or is likely to cause confusion with a trademark used by another brand. You can do this by conducting a trademark search on the website of the United States Patent & Trademark Office (USPTO).
Registering Your Business Locally and Federally
We’ve got our product. We know who we want to sell it to. We’ve got a brand name to sell it under. What’s next? Well, if you have decided to form your business as an LLC, for-profit corporation, an “S” Corporation, or as most other corporate structures (this does not apply if you are a sole proprietorship), you are going to have to register your business with the New Mexico Secretary of State (assuming you form your business under the laws of the state of New Mexico; if you are considering incorporating in other states or countries, you should really get the help of a corporate attorney). There is a small fee involved and annual documentation requirements, but the process is remarkably fast. You’re not done, though. At this point, you should register your business with the IRS and obtain an employer identification number (EIN). Ideally, you should also register your brand name and logo with the USPTO. Registering and protecting your intellectual property is important as larger brands appear to have no problem stealing the logos, artwork, and other intellectual property of smaller brands. However, if you are not financially able to register your copyrights and trademarks at this time, then these are tasks that can wait a short while.
Licensing and Permitting
Many municipalities require small businesses to have a business license to operate, even when it is an at-home business. You will want to check with your municipality (and your county) regarding whether you need a business license or any industry-specific permits, especially if you are operating a food service or retail goods business. Additionally, you may want to see if your business is subject to regulations enforced by specific state and federal administrative agencies or divisions of those agencies (for example, if you make a product that has alcohol in it, if you make or sell goods related to firearms, or if you make health and beauty items). It is better to know what administrative regulations apply to you so that you are not hit with a compliance action than to be surprised by “the boys in the blue windbreakers.”
Explode on the Scene
While the heading seems melodramatic, it is important for a new small business, whether B2B or B2C, to build up its social capital and develop relationships in the local business community. While I obviously think digital marketing has a substantial impact on becoming known to potential customers, I have long believed that it’s important for entrepreneurs to know others in the business community. Running a small business is isolating and challenging, and new small business owners face even more stressors than established small business owners. Having a friendly face to discuss business challenges or to ask questions of goes a long way to alleviating that isolation and stress. (To be clear, that networking could occur virtually, as we all may have learned during the pandemic, but it should be focused on the local and on building local relationships whether virtual or “in the real world.”)
I also think it’s important to mention that networking and building relationships in a business community does not always occur in or require membership in traditional networking organizations, such as chambers of commerce, BNI, or some other form of business mingling organization. Many communities, especially here in rural New Mexico, no longer even have chambers of commerce, sadly reflecting how often organizations like these can become unhelpful and stagnant. These organizations can be replaced with non-traditional networking opportunities, such as community service groups (like Rotary groups or the Knights of Columbus) or active and vibrant family organizations (like PTA organizations, little league or Pop Warner groups, or even the adult leadership of Boy Scout troops). It is more important that the business – and its products or services – is well known and thought of highly than it is that the relationship began with a business-oriented organization.
We broke down a lot of the steps that need to be taken as part of setting up, promoting, and marketing a new or relocating small business in New Mexico in this article. We have covered those things to do to establish the identity of a business with the government (establishing a corporate structure, obtaining a state and federal tax identity for the new business, and obtaining the necessary licenses and permits for the business). We have covered setting up a name and developing – and protecting – intellectual property for the new small business. Lastly, we have covered using local networks to get the brand name and its products known to the local public and to obtain access to other entrepreneurs that can help deal with the challenges of operating a small business. There are a lot of other things that new small businesses should consider, but this is a good way to start.