Mastering your local market can be a very daunting task; so naturally, navigating a foreign market can be intimidating. Although the fear of failure and the unknown can be distracting, if executed correctly, the rewards of growing internationally can be tremendous.
Choosing a new market
Experts in this field will often suggest that you evaluate your current market, analyze your business’s market presence locally and follow the same procedure internationally. The most important component of evaluating a new market is research. Gather as much information on the new market as possible and be sure to ask yourself questions like:
- Is there demand for my product or service?
- Who are my customers? (demographics, psychographics, etc.)
- How will I reach my customers?
- What is the size of the market?
- Are there any barriers to doing business here?
- Are there language, political, or shipping concerns?
- Are there any special regulations that I need to be aware of?
- Who is my competition?
- What is my pricing strategy for this market?
- Who are my potential partners?
- What is my cost analysis? (rent, supplies, shipping, etc.)
- Are there any market trends that I need to be aware of?
Talking to people with knowledge of the particular country you are considering can also be invaluable. There are many experts out there who are willing to share their expertise and assist you in your pursuit of new markets. A great starting place is the Department of Foreign Affairs, Trade and Development Canada. It’s mandate is to encourage international trade.
It is also very important, when considering making connections internationally, that you have the ability to embrace technology. Technology can offer efficient solutions with respect to invoicing, shipping, etc. You should never forget the importance of having an effective website, keeping in mind differences in language and currency. Email, a toll-free number and a website are exporters must-haves. You need to make the buying process easy for the international shopper and technology can help you do just that.
There are a number of factors that can make a market enticing, specifically for you and your business. Evaluate the attractiveness of the market by asking some of the following questions:
- Do you already know people in that country? Do you have family or friends there?
- Do you already have staff with connections in the country?
- Is there a major event occurring there in the future?
- Is it easy to reach? Can you travel there easily?
- Is there profit potential?
The ability to easily incorporate the tools that have led to your success locally can be very advantageous. If the market conditions afford an easy transition using the business strategy that you already have in place, then that may be the first international market that you will want to consider.
Narrowing the search
When selecting a new market, it is a good idea to develop a short list of potential areas. By evaluating all of the above, ideally, you will narrow your search to a prime focus. It is smart to implement a concentrate on a few, not many strategy.
It is important to not overlook the smaller markets. Many companies’ first impulse may be to pass on smaller markets, but this can create an opportunity for you to sell your products or services in an unsaturated market. Less competition may mean more business.
Finally, trust your intuition and do business in a place where you want to be, because realistically, you are likely to spend a great deal of time there. Once you have selected a market, visit the area. This will allow you to gain an on-the-ground perspective of your potential customers as well as your competition. It will also help you gain knowledge about any regulations that will affect your operations, give you a more in-depth look into your distribution options, and allow you to make some great contacts. Being on the ground at the start can also help you to evaluate any potential issues that may arise and create an opportunity for you to prepare for those contingencies.
Breaking into a new market is a long-term commitment. It takes time, money and hard work. Your whole team should be committed to this undertaking. Ultimately, the goal is profits, stability and efficient use of your resources. Don’t spread yourself too thin; if you have identified numerous markets, keep in mind that once you have successfully entered one market, you can move onto the next. One point to another…that’s connecting.