If you run a successful startup, you might consider penetrating a new market and expanding your products or services on a global scale. Of course, there are many elements to take into account before making a decision that could make or break your startup’s future.
Ultimately, it’s essential that you are prepared, educated, and aware of the possible market entry challenges, so that you can formulate a strategy that will lead you toward international success.
Before making the big decision of whether or not penetrating a new market is right for you, consider the following questions to determine if this is the best time and direction for your business.
Do you have the cash-flow to support new market entry?
Successfully entering a new market can be a very costly endeavor. Conducting market research, creating and implementing a new online marketing strategy, and hiring local staff can all make dents in your business’s cash-flow.
If you have funding set aside that can cover these additional expenses, it is a positive sign that the timing could be right for you. However, if your finances are currently unstable or your funding from investors is yet to be determined, jumping into a new market could be a bit too risky. Without the proper safety net that will protect your company if things go south, you’re putting your entire business on the line.
Do you receive international leads?
Take some time to consider how much of your company’s interest comes from international enterprises. Do you regularly receive emails from overseas with serious sales inquiries? Has your name been mentioned by international players in relevant industry settings (online publications, influencers, conferences, etc)? If so, those are clear signs that your product or service could be in great demand in international markets, and you should act accordingly.
Have you already dominated your local market?
If your company is the clear leader and go-to choice within your current market, it is a good time to ask yourself how your company can grow further. Often times, the best move to promote your company’s growth is to enter new regions. This can also help protect your company against the risk of stagnation or future declining sales in your current market.
Of course, just because your product sells well in the United States does not mean that its success will transfer to other markets (just look at Airbnb in China). However, if you’re in a good financial position and have the means to take a risk in a new country, this could be an opportunity that you should take advantage of. Just make sure to do your research, adapt your value proposition and assets to cater to your new audience, and follow the proper steps to enter a new market.
Does your company have a unique advantage to compete in a new marketplace?
If your product or service is competitive in other markets in regards both quality and price, you should do your research to determine your unique edge. Perhaps your product or service could have other applications in a different country, or maybe it could fulfill a specific need that your target audience has that your local competitors do not cater to. Think beyond the usual uses for your offering, as well as cultural influences, and you might be surprised at the international opportunities that you discover.
Ultimately, your decision to expand into international markets should never be determined by one single factor, and timing is often at the core of a successful move. By asking yourself these questions, you will have a much clearer picture of your startup’s current position and possibilities for the future.
Once you’ve asked yourself these questions, and all the answers lead you to enter a new market, you need to make a plan, stay organized, and keep on track. Download this free New Market Entry Checklist, print it out, and follow it for the best chances for success.