Business expansion is an exciting milestone for any business. Despite the economy’s volatility due to the impact of the ongoing pandemic, the opportunity to scale your business is possible. Growing your business does not only means serving a new market. It can be in discovering a unique niche within your current market and offering them a new product. Expansion can also mean improving the buying experience, so you grow your loyal customers. Regardless of your business expansion, you must know when you should commence. If you enter the market too late, you will face stricter competition who already seized the shares on that market. Here are five signs to help you determine whether you’re ready.
You have outgrown your current market
If your brand has already built a solid customer base, expanding to a new market might be the next step to acquiring new customers and keeping your business growing organically. Check your monthly performance and see if you are already hitting a plateau. However, keep in mind that no matter how big your brand’s existence is in your market, it may not automatically translate well to a new market. You will still need to provide a relevant message to your target audience and experience that reflects consumers’ preferences in your new target market.
You have a healthy cash flow
The next step is to review your net revenue. If you are already hitting your monthly target revenue, see if you can reallocate your resources in business expansion. Ensure that you have a significant amount of cash to keep the current business running while considering the risks involved in business expansion.
You have identified demand for your products in the new market
Some brands and retailers first start coming with the idea of going global when they notice significant and consistent traffic to their domestic e-commerce site from customers in other countries. However, many retailers learn the hard way that a product selling well in their home country may not have the same appeal elsewhere. Therefore, brands and retailers must do market research before they enter a new market. Analyze to answer the questions: Do I have a built-in customer base in the foreign market I want to join? Can I reach that customer base in the target market? Here’s a guide for you to do market research on the new market.
Like when you first launch your business, it is essential to do market research before entering a new market.
You have mastered a competitive pricing
Brands and retailers that already had competitive pricing compared to local competitors will have a leg up when they enter a new market. Cross border selling introduces greater complexity when it comes to pricing, especially regarding factors such as landed cost. But retailers who have spent considerable time developing a local pricing strategy may find that going global is simply reiterating their current pricing formula.
Your industry is growing
Last but not least, you have to make sure that your industry is growing. It will help you expand your business easier. Monitor your industry trends to find out if your market is on the rise. If your industry is stagnant or fading, you might want to reconsider the expansion. Your industry might not be able to support your business if it is bigger or has more locations.
Even if your business is stagnant, you might still be able to expand your business by offering new products or categories. Think about offerings that can help future-proof your business. These new products or categories can help you gain revenue and stability while waiting for the perfect timing to grow at scale.
New market expansion places a greater demand on the internal team, particularly when it comes to tasks such as order fulfilment, logistics and shipping. Managing all of these aspects, along with serving customers in each market, can be daunting. However, careful analysis of your business performance and market research mitigates the risk of loss and increases your chance of winning. So, are you ready to expand? Here in Omnilytics, we can help you prepare through competitive benchmarking and trend performance in regions like North America, Europe and Asia.