Your business is booming. Sales are good, and you’ve been growing for a while. But things are levelling off now. The developments you once had are becoming stayed, and you need some new ideas to build up advancement again. This could well mean it’s time to say hello to new markets.
Whether you set up a new branch, test the water in a new sector or start advertising internationally, breaking into new markets is a great way to regenerate growth. But any new venture needs to be handled in the right way to ensure your attempts don’t fall flat.
Here’s a quick step-by-step guide to planning for expansion – and making sure you place your time, budget and efforts into the areas that will be the most profitable for your business.
Work out your provisions and goals
Your company provides something. Be it a product or service, you have customers because of that “something”. So, to keep moving forward, you need to find new audiences who will benefit from what you can offer.
Think about what your company can provide in a new market; where you may be able to satisfy demand. Write a list of everything you can supply and who it does – and can – benefit. Then, when you’re confident that you can fulfil a ‘need’, work out what you wish to achieve from going into these new markets. Do you want broader reach for your brand? Do you have a target for improving your competitive position? Or are you more concerned about achieving more bottom-line sales? Either way, setting goals now will give you and your teams clear and measurable objectives that you can work towards in the coming months and years.
Do your research to validate your next move
This may seem obvious, but researching your chosen new market is imperative. You need to know what you’re tackling and how that market works before you can make a plan to enter it.
It’s not simply enough to make assumptions about a market segment, either. You need to gather data from your new target demographic directly and analyse their responses to your new proposition. You could start by organising surveys, questionnaires, interviews, or even focus groups to get useful feedback straight from the horses’ mouths.
Gathering information from online sources and other third parties will also help you build a bigger – and perhaps more accurate – picture of your target market. Think with Google is a great way of finding out more about consumer insights.
Make sure to make your research country-specific if you’re aiming to expand into an international market, as there will be geographical and cultural factors that will influence your success further afield.
Then, once you have these preliminary findings, it’s time to dig a little deeper. If your market is in a specific location or country, go to trade shows, expos and networking events in the area to gain a better understanding of your target customers and your biggest competitors in the space.
Consider partnerships
You don’t necessarily need to jump into a new market alone. Consider potential collaborations and alliances with companies that already understand the territory. You’ll be curtailing a lot of market research by following experts already in the know.
These kinds of positive brand associations can also help to strengthen the positioning of both parties, not least by drumming up extra engagement from joint marketing campaigns.
Follow your clients into a new market
Similarly, you don’t always need to search for ways to reinvent the wheel. The market you wish to break into might be just under your nose. If you know a client of yours is breaking into new markets or is already in a market you’re considering, follow them. They may be able to offer insights and connections that will speed up your progress.
Look at your competitors
The organisations that are already doing well within your new target market have something you don’t: experience. And there’s no reason why you can’t learn from their successes (and, of course, their mistakes).
Make a note of your top three competitors in this new market and create a competitive matrix to help you identify and compare their positioning to your own. You may want to consider questions like:
- What are your competitor’s strengths and weaknesses?
- What are the opportunities within the new market – and are your competitors set up to take advantage of them?
- What potential threats are these competitors facing – and could you find a better way to minimise risk?
- What percentage of the market share do these companies have?
- Is their target audience the same or different to yours?
(Hubspot have created a brilliant template you can follow if you’re new to this exercise, which includes plenty of examples.)
Review your cash flow
Understanding your cash flow prior to expanding is crucial. You need to create a new business plan, which will include forecasts for the fresh market. You’ll then need to work out the prospective costs and profits of your venture, and whether these are viable based on your current operations.
If you can, create a separate cash flow forecast for expansion during the planning stage; a kind of new project ‘budget’, if you like. This is something our outsourced finance directors can assist with if you’re not sure how to manage or interpret your accounts, or you just want reassurance that you do indeed have the funds to take on new markets without damaging your current business finances.
Review your plan – and your progress – every month
You shouldn’t only draw upon your research at the beginning of your project, nor should you expect to stick to your business plan without making any adjustments. Needs change, and you’re likely to encounter unforeseen challenges – so be prepared to be flexible, and make sure you keep a close eye on your plans and your finances as your move into your new market takes shape.
Check in with your customers
Breaking into a new market is all about building a rapport with the people who will benefit from your products and services. Your consumer relationships should be your biggest priority – and this applies to your current customer base, too.
It makes sense to promote your new offerings to the people who have already bought from you. Their thoughts and feedback can form a crucial part of your initial research. But be sure to target existing customers or clients with tact and respect. Don’t let your desire to dominate your new market result in marketing that’s too pushy, an approach that’s too heavily focused on sales, or a strategy that detracts from the messaging that has resonated well with your audiences so far.