Tips for Growing Your Business into Other Markets

The growth stage is considered to be one of the most thrilling and demanding phases during the business lifecycle. Now is the perfect moment to explore, develop, and launch new goods and services, target markets, or even a new footprint.

Whether you’re growing your e-commerce or establishing a physical office, retail store, or manufacturing space, extending your business into new areas has both advantages and disadvantages.

Benefits of geographic expansion

When considering geographic growth, two things spring to mind: raising earnings and expanding income streams. But there are other advantages as well. Expanding your reach can help people recognize your brand more easily, and customizing your goods and services to suit local, national, or international tastes can encourage creativity.

Another significant advantage is diversification. The risk associated with depending just on one market or area is reduced when operations are conducted across many locations.

If a natural disaster, geopolitical crisis, or supply chain disruption occurs in one of the regions where you operate, spreading the risk over a larger area can also assist protect your organization.

How to determine if your business is ready

Consider your company’s needs and where you are in the business lifecycle before growing. If these apply to you, you probably have a favorable situation.

• Major corporate objectives are being met. You have a strong client base that keeps coming back, steady revenue growth, and good cash flow.
• In other markets, there is demand. You are getting orders or inquiries from clients who live outside of your existing area.
• The money is on hand to make it happen. You possess sufficient financial reserves to finance the extra infrastructure required for growth, or you can obtain loans.
• You have a strong group. You put your trust in your personnel to maintain a seamless operation while you concentrate on your goals for expansion.
• There is growth in your industry. Important metrics indicate that growth will continue rather than slowing down or stagnating.

Deciding where to expand

Asking the correct questions is the first step in developing a sound expansion strategy.

What needs could you satisfy for clients? Which local competitors are you going to face? Does your organization have the means to overcome obstacles such as inadequate infrastructure or language barriers?

Further helpful is incremental exploration. You might start by including the mid-Atlantic if you’re a window maker in the Southeast who would like to reach all 50 states. Alternatively, a national grocery store company could expand internationally by first setting up shop in Mexico or Canada.

Common challenges of geographic expansion

You may need to make changes to your operations, logistics, compliance procedures, or other strategies to overcome the challenges associated with entering new markets.

Recognizing the local hiring context: Every state and every country has different labor laws and hiring practices. Learn everything there is to know about the laws and practices in the area regarding things like taxes, onboarding and training, remuneration and benefits, and data privacy.

Investigate the local talent pool as well. Can workers with the talents you require be supported by the local economy? Is there a conduit that you could use to access a nearby university? Think about whether hiring remote labor is a good fit for your project as well.

Modifying the supply chain – Reassessing your supply chain strategy is necessary when expanding your business into new areas. Will you need to locate new local suppliers, or can your present suppliers service these expanded areas?

And how about getting around? Even if trucking meets your needs for the time being, will you eventually need to access new markets via rail or air? A new set of factors will also need to be taken into account if you decide to expand internationally, such as international import and export regulations including tariffs, charges, and customs processes.

Be prepared for new regulations: When you expand your product line into new states or nations, you’ll need to adapt labeling and packaging, safety procedures, environmental policies, and other aspects. Every state in the union has its own requirements for products like mattresses, lead-acid batteries, and skin care items in terms of compliance. You can prevent fines and legal ramifications later on by doing your assignment now.

Dealing with competition – Establishing a new market requires taking on established brands in competition. Doing market research to identify competitors and trends could help your business separate from the competition. Next, determine what unique qualities your business offers, and utilize that value proposition to develop focused marketing and advertising campaigns.

Once you have established a local presence, you may assess your goals and results. That is what makes the growing stage exciting. The options are endless.