Growing your business is one of the things you have to plan for if you’re in a leadership position. If you’re not trying to grow, you’re going to be outcompeted by other businesses who are looking to snap up your share of the market. Unfortunately, while not expanding is a death sentence, expansion brings its own challenges with it and it’s those we’re looking at today. Understanding the pitfalls that lie ahead can help you to avoid them.
Expanding into markets abroad can be a great opportunity for your business, especially if you’re selling a digital product, without significant shipping costs. What you have to be weary of here is applying the lessons you learned in your home market indiscriminately: international customers are bound by different laws, have different spending power, and value different things. Failing to take any of these things into account could have a range of consequences, from a fine to the failure of a marketing campaign, and the waste of the resources you’ve spent trying to establish a present in this new market.
You can avoid a lot of these risks by working with a reputable international research company, who can help you establish a profile of the market you’re moving into, not merely ensuring you know the level of demand that exists in your target market for your offering, but also the trends that define how customers make their purchases in that market.
Expanding, be it by searching for new customers at home, breaching new markets or diversifying your offering comes with financial investment as a necessity. If you don’t have the financial resilience to see out the time when you’re paying to build out to a new place of stability and profit, you might find yourself overbalancing. A failed expansion might not just result in failure for that new profit, it could also leave you unable to support the foundations of your business altogether!
There’s no way to eliminate this risk entirely: any big expansion for a business is going to be a gamble, at least partly. What you can do is budget carefully, make sure you understand the risks in your market, and try to ensure you have either enough money banked to see you through this challenging period before your new venture becomes self-supporting or investors that believe in the future of your company enough to provide the finance you need to build outward without putting your core at risk!