Are You Ready For A New Market?
6 Tips to Prep for New Market Development
Many strategic growth plans call for expansion into new markets as businesses seek to replicate success in their current channels in new territories or adjacent industries.
Expansion into new markets is certainly a viable strategy but carries considerable risk. How do you know if you are going after the right business? When do you cut bait or double down? Is it better to test the waters in several markets at the same time or concentrate your resources on one new market at a time?
Developing new markets is big challenge and there are many pitfalls. First, it is all too easy to take your eye off the ball and get sucked back into your old business routines and status quo. On top of that, it may take a lot longer than you think to break into a new market. How long are you prepared to wait until? For a short while, you’ll likely benefit from the buzz of being the new kid on the block. But, that novelty will wear off quickly if you fail to prove your value proposition early on. In addition, developing a new market may require new business processes. That can be disruptive. New customers may not do business exactly the same way your current customers and you may have to adapt. If you don’t, those new wins may soon go elsewhere.
Is it worth it? It certainly can be if you are prepared. Here are six recommendations to help you get ready:
- Do your homework. Don’t jump into a new market without conducting the necessary industry, customer and competitive research. Have a full and realistic understanding of what you are getting into.
- Be objective. Don’t rely on gut instinct, hunches or be swayed by pie in the sky growth projections. Develop a list of criteria, meaningful factors that truly matter to your business, and rate each new market opportunity against those criteria. Use a scoring tool to help guide your evaluation. The highest scoring options will be your first priority.
- Hire an expert in the market. If you’ve never ventured into the market before, bring someone on board (as a consultant or employee) who knows the ropes, speaks the language and has a proven track record in the new space. An experienced player can save you a lot of time and resources.
- Get your house in order. Conduct a thorough gap analysis to identify all of the issues, resources (talent, time, treasure), and processes (sales, operations, administration, etc.) needed to respond to the new business requirements.
- Bring your full squad. Too many times, I’ve seen companies fail to develop new markets because they don’t dedicate the full resources of the company and make it an organization wide effort. Small task forces often don’t have the juice or authority to make the new market push a reality. Make sure that your whole team understands the mission and their role.
- Laser strike. It may be tempting and satisfying to your ego to make a big splash in a new market. But, before you go for the whole hog, you may be more successful earning some small wins and then go big.
Good luck out there!