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As a small or medium-sized business (SMB), do you have your sights set on expanding your reach to new customers by entering a new market … specifically a market overseas?
As CEO of INS Global, I have seen firsthand how SMBs can expand effortlessly by studying the lessons of expanding multinational companies (MNCs). Here are five actionable ways to achieve new market entry without having to start from scratch.
Related: Successful Leaders Think Globally — How to Expand Your Business Abroad For Maximum Success
1. Look before you leap: Conduct market research
Entering a new market that at first glance looks profitable and stable is an exciting proposition. However, take time to deeply understand the market you are about to enter. MNCs often conduct extensive research prior to entry, and SMBs can collect the same kind of information on a smaller scale. When car maker Toyota entered the U.S. market, it manufactured cars that were reliable, spacious and comfortable, as American consumers value these qualities. Its market research paid off, and Toyota is a leading automaker in the U.S. today. Be sure to analyze your target market prior to entry:
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Collect data directly from the new market: This may come in the form of government reports, trade association communications and following thought leaders in the new market.
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Identify your target market and research the competitors: What are their strengths and weaknesses, and where can you differentiate yourself from the competition?
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Prevent potential roadblocks: Are there special regulations that apply to your industry or product category? What is the current and forecasted level of demand for your product or service?
2. Set goals for small progress
Don’t let planning become a form of procrastination. Your primary goal of expanding your business should stay front and center. Otherwise, you risk spending all your time focusing on “what if” instead of focusing on “what’s next.” Focus on taking small steps forward and adjusting as you go, making sure to get out of your own way.
Starbucks has widely been hailed for finding success in China’s marketplace in a way that has been elusive to other MNCs. At first, Starbucks launched a single store in China to test receptivity. It did not wait until it had the perfect model, the perfect menu or the perfect long-range plan in place. The company started with a small step into the Chinese marketplace. Because it initially focused on optimizing one store, it was able to quickly make needed adjustments prior to full-blown expansion. As of 2023, Starbucks is now opening more than one store every day in China.
3. Collaborate with other SMBs in your new market — even competitors
By collaborating with other small businesses currently in the existing market or those looking to enter the same new market, you can lower the risk, share costs and gain access to shared resources. For example, in 2009, competing cell phone companies Vodafone and Telefónica formed together a strategic partnership to enter new European markets. As an SMB, consider partnering with a company that can help navigate a new business expansion. At INS Global, we help companies expand with success, by specializing in finding local candidates that are perfect to fill the job in your new location. The best part is our clients don’t need a legal entity in the new country. We hire and pay their employees legally as their representative.
Related: Here’s How to Make Your Expansion Into New Markets a Success
4. Stay visible and build your network
You may be thinking to yourself, “I don’t have time to put out a newsletter, scroll through LinkedIn daily or post on social media.” Networking may seem like the first item to fall off of your to-do list, but if you don’t grow your company’s online visibility or fail to tailor your company’s value proposition to new markets, you could be missing out on access to new opportunities and increased brand awareness.
Building relationships through intentional networking can help you gain access to new opportunities within new markets. You can also find another SMB that has successfully entered a new market (possibly even your new target market!) and seek their mentorship, guidance and coaching on business growth, the local market and cultural nuances.
5. Avoid autopilot at all costs
SMB entrepreneurs aren’t the only ones who suffer from hitting the “easy button” when entering a new market. As you look to enter a new global market, take time to learn from the mistakes of MNCs. It’s hard to imagine a multinational company like Target struggling to find success, but that’s exactly what happened when Target tried to simply duplicate its U.S. business model.
The cultures and market seemed so similar, what could go wrong? Due to its lack of understanding the local Canadian market, the foreign exchange rates and Target’s inability to quickly adapt to such challenges, Target’s 2013 entry into the Canadian market was deemed a failure. Just two years later, the retailer closed all of its stores in Canada.
Target’s failure does not mean you will inevitably fail if you enter a new market with the exact same product and business model that you are currently using. But by staying vigilant and adaptable, you can overcome any unforeseen challenges that you may not have originally considered.
Entering new global markets can be a great way to expand your small business, even though it can be an intimidating journey to begin. By following the tips in this article, you can increase your chances of success and accelerate your growth.
Related: Is Your Business Ready for International Expansion? Here’s What You Need to Know.
