Expanding your startup business into new markets can be exhilarating and at the same time frightening. When resources are tight, you want to make sure you get the most out of your investment. There are a number of items a startup must consider when expanding into a new market including:
Human Capital
Who on your team is going to lead this new market charge and what is their experience? How large is their network? Do they have an understanding of the language and culture? All of these are important as in many cases, with all else being equal, having a team that can execute efficiently on a plan can make all the difference.
Financial Resources
Capital is always a consideration and depending on your product or service, can be a light investment (e.g. setting up a basic sales office with one or two staff). Alternatively, it can be more intense if a building, equipment and numerous staff are required. Be careful to watch your burn rate, and set specific goals and milestones to gauge your success.
Market Entry Strategy
The path to market for your product or service is of ultimate importance. Without revenue, there is no business. Consider what is the most effective way to get your product or service to market – direct sales, channel or reseller sales? In some cases. it could be a combination. Have a firm grasp of the size of the market opportunity, pricing, product / service positioning before you go in full bore.
Market Messaging and Branding
Definitely related to your market entry strategy, you must ensure that your branding, messaging and value proposition points are well received and resonate with your target audience in the new market. In some international markets, colour and wording have a variety of meanings versus that in your home market. You want to ensure you manage this accordingly.
Regulatory and Legal Environment
Understand where you stand with respect to intellectual property and the legal liabilities associated with your operation in that market. Be sure to have good legal representation to ensure you are not caught off guard by an unexpected disruption to the business.
Competitive Landscape
Prior to entering the market you should have done a market analysis and one of the components would be the competitive landscape. Most people are great at identifying direct competitors but oftentimes do not take a look at indirect competition that is fighting for the same budget dollar.
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