6 Factors to Consider When Evaluating a New Market

When you’re considering new markets to sell your products or services, it’s important to look at them through the lens of risk and reward. Sure, you can enter new markets and make money, but failing to do the proper research beforehand could put your current business in jeopardy and cost you a lot of time and money. Evaluating whether or not entering a new market is worth it based on six factors can help you come to the right decision.

Are you already in another market?

One of the questions every business must answer is whether they’re ready to branch out. While expanding your horizons can open up new opportunities, it’s important to weigh these potential benefits against their potential drawbacks. If you already have a successful presence in another market, you may want to wait until your previous market is secure before creating another one.

Does your core competency lend itself to expansion?

A company’s core competency is that which it does best. Is your product or service something that will translate well to other markets? If you’re trying to expand into new areas, make sure your core competency fits with that new market.

What are your revenue projections in this market?

One of your main considerations in evaluating a new market is whether it can support your business. If your company will not make money, it’s not worth expanding into that market. Make sure you have realistic projections for your revenue and do further research to ensure those projections are accurate.

What other brands have been successful in expanding into this market?

The first thing you should consider when evaluating any new market is whether or not other brands have been successful in expanding into it. Researching what brands like yours have done in your particular situation can save you a lot of time and money by showing you which strategies are effective and which ones aren’t.

Is there a demand for what you’re offering in this market?

If you’re planning on launching a business in Mexico, but there isn’t any demand for what you want to sell there, it’s probably not worth setting up shop just yet. The same is true if your product or service appeals only to people in one area—you need to consider whether or not expanding your reach will be profitable.

Do you have experience with competitors in this market?

Even if you’re entering a new market for your product or service, it might be useful to evaluate how your company measures up against your competitors in that space. Do you have experience with their approach? Do they have an edge on you, or are they coming up short in some areas? To know if now is a good time to branch out into new markets, you need to know what potential customers are looking for and if it aligns with what your company is capable of providing.