1. The Critical Questions When Entering a New Market
Before entering into a new market, it is a good idea to ask yourself what level of acceptability the
market must offer to your business before you enter. Here are some questions and concerns to
take into consideration before you make such a move with your business.
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In order to compete within that new market, what must your business offer? In most
cases, the business should offer as many of the services the customer is looking for as is
possible. If you can offer a full service type of product or service, the customer is likely
to come to you over someone that cannot offer this.
How much capital do you need to bring into the new market in order for you to compete
at the highest level, especially against competitors? You may need to look at the costs to
moving into the market and managing your business there. You also need to consider
what sales projections in that market are likely to be and whether the move makes sense
based on this information.
What is the long term outlook for the business within the new market? In order to gain
long term customers, you need to meet the needs of the customer, even as those needs
change. You also need to consider where the new market is going and what that means to
your business.
Is your profitability going to be higher by making the move to this new market or is there
another option for increasing profitability beyond the current level? For example, should
you offer a new service or product or take what you already have and enter a new
market?
How long will it take your business to actually get into that market? This can be a
challenge because each day you are not operational is another instance when you are
losing money. How long will it take your business to open its doors? Take into
consideration all aspects of this process including the development, testing and filling of
distribution channels.
As you can see, there are many factors to consider before you invest in a new market. In some
situations, you may want to make the decision to avoid the move and instead find other ways to
increase the return on profit that your business is making. In addition to these factors, consider
things like the competitive response to your business, any post sale service requirements, the
number of competitors and the ability of the move to fit with your business’s current level of
resources. After taking all of this information in, then decide if moving to a new market is the
best decision for your business’s particular needs.
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