What to know before you expand into a new market

Expanding into a new market can help your business to grow, but it can also threaten the health of your organisation if you don’t go about it in the right way. Therefore, you need to be in full command of the facts and properly prepare for this expansion before it happens.

This will prevent you from stretching your resources too widely, underestimating the scale of the task, and ignoring hidden risks which you might not have considered.

For example, when you focus too heavily on trying to penetrate a new market, you may simultaneously neglect your current customer base. Given that these customers have allowed your business to grow thus far, it could leave you with no market to target.

Of course, these risks should not put you off the expansion entirely, but to ensure that you put the proper foundations in place first. These include understanding the legal and financial requirements for entering the market, conducting thorough market research about your new target audience, as well as establishing your brand before your products or services go on sale there.

This is what you need to know before expanding into a new market:

Learn about the legal requirements

The first step you need to take before you expand into a new market is to understand the legal implications of moving into a new market. For example, there may be export controls to abide by, which could differ from the regulations you are currently used to.

Furthermore, you may have to make certain branding changes in some territories, apply for trading licenses, or a multitude of other legal details which could land you in hot water with the relevant authorities.

Conduct detailed market research

Another crucial element you need to consider is your level of market research. It is unwise to enter a new market without clearly understanding what the market currently looks like, what its customers want, or what problems they are looking to fill.

This could differ wildly from your current markets. Countless businesses have fallen into the trap of presuming they know what a particular group of buyers want but are caught out when they position a product horribly wrong. Not only could this backfire financially, but it can damage the brand if the positioning is wrong.

Possible reasons for a product backfiring in a new market include a difference in demand or requirements, the customers having different cultural tastes, or the brand marketing itself incorrectly.

Establish a marketing presence

A great way to prevent your business from entering a new market only to flop unexpectedly is to market your brand thoroughly in the months before launch. This will warm the target audience up to your products, stimulate demand and ensure that there is enough awareness of your brand.

Expanding is an expensive process, and you want to minimise the time spent incurring losses, trying to sell products no one knows about. Pre-emptive marketing also warns your business as to whether there is a fundamental problem with your brand in that territory before you formally launch.