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My company, Educate Online, specializes in online education. We are actively expanding the geography of our presence: Latin America, India, China, Nigeria and other emerging economies.
All markets are unique, but there are some common things that you should know before reaching new destinations. Today I want to share with you some experience and insights that I gained during the launch of a product in new, foreign markets.
Reasons to look for new markets
First of all, why should you even consider entering new markets? It’s not a simple question. There might be many reasons. Here are a few of the main ones below:
New markets mean new opportunities: As the business flourishes and the company’s market share increases, the entrepreneur can face growth constraints. After all, in many cases, the local market has a limit. The most important thing here is not to miss the moment you have reached a particular ceiling. At this point, you either actively develop, look for a new product, grow or stagnate, and then your competitors outperform your company. Remember that a business that wishes to be the top enterprise must continuously spread its roots.
Diversification protects you from risks: Don’t put all your eggs in one basket. Every investor knows you cannot invest all your money in one asset. The same rule works for businesses. If your company’s profit depends on only one market, then in the event of an economic, political or any other crisis, you risk losing all your money. A problem like this will not affect your business if your company has sources of income in other markets.
You can quickly gain a competitive advantage: Entering new emerging markets means that you can receive substantial competitive advantages. A successful start can ensure the company’s prosperity for many years. It often happens that we look at a foreign market and immediately understand that this market could be our lucky ticket. Any delay could play into the hands of our competitors.
The benefits of entering a new market seem apparent, but what about the disadvantages? Are there any? And what should you keep in mind when starting a business in an unfamiliar country?
Related: When Is the Best Time for My Company to Enter a New Market?
Risks of entering new markets
Don’t think that gaining a foothold in a new market is quick and easy. Entering a new market carries several risks and difficulties our company has faced. Here they are below:
Cultural risk: The discovery of a new market is always accompanied by a search for a new product that would satisfy the client’s needs. The preferences and financial capabilities of the audience are very different, so it’s tough to say which product will be successful in advance. In addition, the mentality and cultural preferences of the customers in a particular country are of great importance. You need to speak with the audience in one language, understand their problems and needs, and be patient and delicate with cultural traditions.
Need for a new team: Each new market requires upgrading business processes and hiring a unique team of specialists who know the specifics of the local market. All your employees must be immersed in the market knowledge and understand how to interact with new clients. Finding such professionals is a puzzle that can take weeks or months.
Country risk: It would help if you remember that there is always a possibility that significant economic or political changes may occur in the country where you do business. As a foreign citizen, you should never forget that your business will always be at high risk in a foreign country. In this case, you can invest money and time — and at the same time, not understand the returns that you’ll get.
Related: Here’s How to Make Your Expansion Into New Markets a Success
As for me, I realized that it is worth looking for new markets only when you already have a successful and sustainable business. You must have a foundation upon which you will build something new. If it’s not there, you may fail in the new market and lose your position in the old one.
In addition, when entering a foreign market, you must immediately determine the timing of the search for the minimum valuable product (MVP). The main mistake is to get bogged down in the market in the endless search for MVP. So, try to create a product that will have a unique benefit for your client worldwide. This way, you can significantly increase the chances of your company’s success.