When to Expand into New Markets
by Deepak Tailor
It’s a problem that many small businesses dream of facing, and many will never get the chance to do so—when to expand into new markets and which new markets to aim at. Once you’ve survived the first few years as a new start-up and are in the enviable position of having secured a genuine profit, expansion is normally the next obvious route, with the siren call of new audiences being hard to resist. However, in many respects, expansion can be as difficult, time-consuming, expensive, and risky as the original business launch, so you have a lot to consider, a lot to research, and a lot to learn.
I launched my own business, LatestFreeStuff.co.uk, in 2012. Since that time I’ve been able to drum up 400,000-plus web hits per month, 75,000 email subscribers, 70,000 Facebook likes, and more recently, 8,000 Twitter followers. When you’ve started from scratch, that’s an amazing place to be, and at the end of last year I decided that America was calling—it was time to expand the business. These are the tips that I picked up on my expansion journey.
Develop a local mindset
It perhaps doesn’t take a genius to work this one out, but Americans aren’t like the British. Yes; we share a lot of the same values, we have a shared history, and we have the famous “special relationship,” but as consumers and business people, we are worlds apart. Pitching a product in America is different—schedules are tighter with no leeway and no room for mistakes and investors are looking at things from a different angle—a local angle, which if you’ve failed to do your research, you’ll never comprehend. Product and production standards also vary, so while my business model, which is based around the concept of “freeganism” does appeal to the U.S. audience, it did need tweaking and reshuffling to reach favorable ears. If I expand again into another country—Australia, Germany, or France—no doubt other cuts and tweaks will need to be made. As a business owner, it’s your job to make your product appeal to your new audience; you can’t expect the audience to change to suit your style.
Take your time
My biggest mistake when originally attempting to expand in the United States was to move too quickly. The American market is vast; so much bigger than the U.K., with many more competitors, so my initial plan—throw as many resources as I could at the market until something took hold—pretty soon fell by the wayside. What I should have done, and am now doing, is take the time to research and build an effective strategy, covering all areas of the launch, then stick to it. Strategies do obviously need some flexibility—you can’t be completely rigid in business—but we’re now working to a plan, which we change as the need arises, but it gives us a useful framework to build upon.
Get the right team
This was another area where I initially came unstuck. Enthusiasm is a wonderful thing, but it sometimes needs tempering with local knowledge. I began LatestFreeStuff as a solo project, so that was more or less the approach I took with the expansion. Ironically, part of it was a money-saving exercise, but working alone probably cost me a lot more in the long run and I’ve since found out that there are better ways to work. We now have a small local team, each member a specialist in their personal field, and together they have helped shape our U.S. operations, changing it from a promising idea into a functioning business. Mine is an online enterprise, so I am able to keep manpower to a minimum, but when you’re expanding overseas, I can’t overstress the benefits of including local talent. If you can, look out for people who have been entrepreneurs themselves; that way you’re getting someone who knows what’s expected in the early years of business and has the drive to get up and go.
Use your success
It’s often said that “success breeds success,” so the fact that you already have a successful business in your home country sets you in good stead for developing that business elsewhere. For me, it was easier to develop my business overseas by sticking with the DIY principals that had already served me so well in the U.K.; investors can be the key to a successful business, but they do bring exacting terms and conditions, so I’d advise you to tread carefully. However, if you are looking for an outside cash injection, investors are happier to part with their money if you have a proven track record to show them. The same applies to partners, so get out and blow that trumpet as loudly as you possibly can.
Be prepared for miscommunication
You might speak the same language, but as already established here, different countries do business differently, so don’t make assumptions based upon throwaway statements. In America, for example, they’re very keen on positivity and affirmation, but just because someone says that they like your product or felt good about your presentation, that they’re ready to get on board. More often than not, they’re simply trying to be encouraging, which is nice, but not always very helpful.
Expanding your company into a new market is almost like starting your company all over again. The one major advantage you have on your side is that if you’re ready to expand, you already know what your business is about. You have developed your brand to exactly what you want it to be. You know your audience. And you know what it takes to get as far as you already have— time, energy, money, and sleepless nights.
Business expansion isn’t easy, but when was anything worth doing ever easy? These tips won’t reduce that necessary time, money or energy, but they should hopefully help you to avoid the holes that I fell into.
Deepak Tailor is the founder of LatestFreeStuff, the U.K.'s largest freebie website, the online platform provides freebies, competitions, and deals from the leading brands all in one place. Deepak is also the author of the bestselling book "How To Live For Free," which achieved bestseller status on Amazon within four days of release.
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