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.
- 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.
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- 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.
