Small Business Growth in a New Market

Posted in Business Growth | 6 comments

Your business is doing well in your current market. You know your market very well, the customers you are serving, and the demands for your products or services. In fact, you are enjoying a certain level of success.  Good for you!

Some business owners are content with their current situation, yet others are driven by the challenge to grow their business by venturing into a new or larger market.

If you’re considering entering a new market or targeting new customers, take the time to reflect first. Researching, analyzing, planning, creating strategies appropriate for this new endeavor and a lot more can improve your odds of success. Although the challenge and risk are higher, this path can bring greater rewards – for you, your team, and your business.

So, does one of your growth plans include entering new markets? If this is the best option and the smartest choice, then go for it!

How to Grow in a New Market

Expanding your reach in a new market is an opportunity for additional profit and long-term business growth. It also diversifies your revenue streams and drives the business towards profitability. Still, avoid rushing into the unknown.

When entering a new market, make it your goal to identify the ways to prove your business to a new customer base. You already have a system in place, determine if it completely suits the new market you are targeting.

1. Identify Potential Markets

Perform a market analysis to identify and understand your customer demands, competitors, growth rates, and even barriers to entry. Ensure you have the answers to questions like:

• What are the demographics of your target customers?
• What are the desires and needs of your potential market?
• Does the market have regular, seasonal, or annual needs?
• Will my business offerings be a perfect fit and fill the need of that particular market?
• How is the target market different from my current market?
• Can you differentiate your business from other businesses in the area?

This will help you analyze if your product or service can meet and deliver those wants and needs.

2. Determine Internal Capabilities

A key part of the decision to enter a new market involves a specific analysis of your existing capabilities, your people, infrastructure, processes, and assets that you already have in place.

Ask yourself these questions:

• What are the strengths and core competencies that we can leverage?
• Do we have effective sales channels and infrastructure to support this expansion?
• Who will lead and manage the expansion?
• Will you need additional administrative staffing and resources?
• What are the gaps that you need to fill in?

It is vital to assess your capabilities, capacity, and resources to know if there is something that your business lacks. If there is, then take a step back until you have adequate internal resources.

3. Plan your Market Entry Strategy

• How are you going to introduce your products or services to your target     customers?
• How will you promote your business effectively?

One common mistake in market expansion is the tendency to try to offer a lot and be everywhere at the same time.

It’s better to start by going there slowly, yet surely.  You can do this is by limiting the number of products or services you offer, until such time that you gain customers. This ensures that you’ll keep pace with customer demands.

Also, when branching out, it is better to start closer to “home.” This means sticking to what your business is strong at and what you know well. For instance, you can choose a small town with similar demographics, customer profiles and lifestyle, and needs. This way, you can use the same operation and strategies. The closer your new market is to what you already know, the greater the chances of success.

The Bottom Line

As a business owner, finding an opportunity for growth in a new market is a challenge. But then, this is the very nature of entrepreneurship – exploring new things and taking calculated risks in order to survive and be successful. Start by knowing your options, understanding your new market, ensuring you have strong internal capabilities and a lot more. This also includes not giving up as there will probably be small battles along the way.

Want to learn ways to bring leads to your new expanded business?

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