Business expansion doesn’t always have to mean world domination; it can mean deciding to open a new plant or office location a few miles down the road to grow your customer base.
It’s crucial for CEOs and business leaders to understand the risks and what the expansion will mean for their company. What might work for other companies, may not work for yours.
Tailoring your business plan and marketing strategy to fit your culture is critical to making the biggest impact on the new market you’re entering
Starting a business in a new market can be a big undertaking. When you consider the amount of research, planning and investment that needs to be done before opening your doors, chances are you’re a little overwhelmed. But don’t worry! With these seven tips, you will be able to strategize and grow your business in no time.
1. Define your value proposition
A company planning to grow and enter new markets must be able to clearly identify its value and what sets them apart from the competition. Have a clear idea of why customers choose you and your product or service, as well as why employees want to work for you.
Expansion decisions should be made with the core values and purpose of the company. Even though an expansion opportunity may exist, the first question the leadership needs to ask is, "Is this expansion on purpose for us and why?"
2. Identify your ideal customer
If only we could pick up our current customers and take them with us as we grow. That's why it’s important to know who would benefit from your product/service in order to stimulate growth for your business. Potential customers in your new location may be defined by completely different demographic (B2C) or firmographic (B2B) data, depending on the location of your new site.
3. Develop a Strategy and Business Plan
Expanding your business can be one of the scariest things as a business owner because of all the unknowns that come with a new market. Each market has a different economy, culture, and government that affects how your company will perform. Understanding the new market you are entering will allow you to develop a localized strategy and business plan, so long as it aligns with the organization’s overall strategy.
The best business plan includes a one-, three- and five-year plan with details on financials, marketing, etc. You also want the organizational chart for each year. This way, you and your team have a clear vision of where you are going and who you need in your company to help make that happen.
4. Establish a Marketing Strategy
You are now the new kid on the block; therefore, you have to get your name out there! While you might have the leading product or service in the industry, no one is going to believe you until you show them what you can do. Find the best way to connect with your new customers, whether it be through content marketing, social media marketing, or other channels such as grassroots and event marketing. Tailor your content towards your ideal customer and the local culture.
5. Financial Readiness
Financial sustainability is critical to company expansion; after all, by this point in your life, you have realized that money does not grow on trees. Be prepared for the due diligence required to ensure your company is financially sound enough to make the move. Take early steps to ensure you are adhering to local corporate policies and procedures. Depending on your situation consider outsourcing accounting, payroll, and taxes. In addition, set up attainable financial goals for your new location to maximize success.
6. Invest in Talent
Hiring the right people who are truly inspired and motivated by your value proposition can tremendously impact your company’s growth. Your employees are the first touchpoint that your customers have with your company. Employees who are dedicated to providing your customers with a memorable experience are irreplaceable and a token to keep when expanding your business. Consider identifying a recruiting partner that understands the landscape of the new market’s labor landscape and can support attracting the best talent to your organization.
7. Build a relationship with your new community
You can single-handedly have a competitive advantage over your competitors by building a relationship and supporting local businesses. These relationships may lead to a new business venture, as well as continue to spread your company’s name. Local Economic Development groups, Chambers of Commerce, and Industry organizations are all partners worth starting relationships with.
Going into a new market is exciting, but it can also be daunting. Tastes, values, and needs vary widely across the globe. Your business may have succeeded in its home market, but don’t assume that means it will translate to new locations with the same effect.
Expanding your business goes beyond setting up a brand new location or office. It requires careful consideration on a number of levels, including strategy development, financial planning, marketing, and talent acquisition. Having a plan in place to overcome these challenges will help you reach new heights of success.