By expanding your business into new markets, you can gain more customers and grow the business into a bigger, more successful enterprise. However, when expanding your business into new markets, you need to have the right strategy in place to ensure success. Blindly trying new things can be a recipe for disaster and a waste of money that could be better spent elsewhere. In this article, we take a look at some tips that can help your business expand into new markets successfully.
Review your current customers
You should review your current customers and target markets before expanding your business. By analysing these, you may be able to see potential opportunities for similar customers or new markets. Alternatively, you may notice that there is still potential to gain more customers in the current market you’ve been targeting. This can often be a cheaper and more effective way to expand your business without as much potential risk.
Research potential new markets
If you’ve looked at your current target market and have identified a new set of customers or have a potential market in mind, then you need to do some research. The new market you’re targeting might have different needs and expectations. In addition, there may be competitors in this space that you’ve not considered in the past. For example, imagine you run a hotel business that focuses on personal travel, and you want to try and move into attracting more business travellers. When researching this market, you might find business travellers require additional amenities in their room, such as a desk and a high-speed internet connection. Additionally, there may already be other hotels in the area that provide this and other amenities that are attractive to business travellers..
Focus on a single new market
Don’t try and expand your business into more than one market at the same time, or expand and target a wide range of people. Your marketing material, message, service and potentially your product will need to be adapted to suit your new market. You will have more success as a business if you focus all your efforts on one new market segment and then review the results before expanding again. Choosing the most accessible market first will help you when it comes to expanding into more complex markets. For example, a female beauty brand wants to expand into the gifting market and the male beauty market. By initially focusing their efforts on the gifting market, they will only need to invest a relatively small amount of money to buy gift boxes, adapt their website and create some new marketing materials. By selling an extra large gift box to customers, the beauty brand can make more money to invest in developing male beauty products. They can also learn from this experience and use the knowledge when expanding into the male beauty market, which will be a far riskier and higher investment. This article from The British Library explains more about the importance of market research for new markets.
Budget for the expansion
Expanding into a new market can be expensive; a budget will help you to control the costs of the expansion and avoid overspending. Avoid taking money from other areas of the business for an expansion; you don’t want to lose any current customers in the search for customers in a different target market; this will just spread your business out rather than help you grow. Your expansion budget should include any changes you need to make to your website, products and the cost of creating new marketing material. Advertising costs will also form a large percentage of the expansion costs. Ensure you have enough money to make an impact and determine if the expansion was successful.
Regularly review the results
Regularly reviewing the results of your business expansion is critical. It may take some time, but if you find you’re still losing money months down the line, then you may need to change your approach or try an alternative market. Business is about failure as well as success; good business owners know when to give up on a particular target market and move on to the next potential opportunity. Regular reporting that looks at the customers gained and the money spent will provide the right information to determine success or failure.
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