Breaking into a new market with a new product involves a double set of challenges for your small business: launching a new product and establishing a business presence in a new country. Expanding your business operations into a foreign country is a significant move for any company. With a small business, it is especially important to practice due diligence and examine all the relevant factors before making the final decision to take the plunge.
Overseas expansion has the potential to move your business forward by accessing a whole new revenue base. However, there is a corresponding level of risk with that large potential reward, since such expansion requires significant capital expenditures. Make sure the time is right for the move. If marketplace conditions aren’t right, or if you’re concerned about funding the expansion, it may be best to wait for a better expansion opportunity.
Find Your Ideal Target Customer
Gaining marketplace acceptance for your new product and establishing your business in a new market will be easier if you identify the perfect customer for your product and focus on making them your first customer. The consumer most inclined to have a definite need or desire for your product is likely to be the easiest to convert into a buyer.
Because buyers are often skeptical of new products, be sure to leverage your first customers as a source of referral marketing. Referrals from satisfied buyers are very helpful in allaying reluctance other consumers may have, and they help build trust and establish credibility for your business. You might ask satisfied customers for written reviews of your product.
Pick the Right Business Structure
Carefully consider what business structure will work best for you. You can open a store with your existing business name, essentially establishing a branch office in the new market. Since you’re launching a new product, you might set up in the new market with a new business name. You may decide the best way to access the new market is through a joint venture with a company native to the country, one whose business is related to yours. On the other hand, you could simply licence your product for an existing native company to sell. Regulations and legalities, such as tax policies governing foreign business investment, will impact your decision. It’s a good idea to consult a business lawyer familiar with the country – if possible, talk with professional colleagues who are already doing business there.
When you’re a new business in town with a new product, go back to the marketing approach that was successful for you when you first started out. Rather than trying to close every sale immediately, focus on raising awareness of your business, your products, and your services. Use social media to connect with influencers who can help spread the word. Actively elicit thoughts and advice regarding your product from customers and professional acquaintances. You could set up a focus group to get some organized feedback on how consumers view your product.