The most controllable risks you'll face are internal. Honestly assessing your core competencies and shortcomings will allow you to hone your unique value proposition—the "special something" that sets you apart from your competitors—and make corrections to the weaker elements of your business plan.
If you want to be successful in a new market, then extensive research is required. You should understand who your target customers are, what pain points they struggle with, and how your services can fill existing gaps. You also want to research external risks such as forecasted growth rates, demand, and main competitors. Find a way to turn your strengths from your current market into strengths in this new market too.
Before you enter a new market with an idea of what service you could offer, make sure that service actually meets existing demands. New markets often have a "first past the post" mentality, but if you rush a half-baked product you risk being beaten out by competitors who improved upon an existing service or filled a gap.
When entering any new market, it's important to have a business plan with clearly defined goals. You should know why you're in that market, why you might excel in that market, and what constitutes a success in that market.
While your business strategy should rely on your core competencies, you need to stay nimble if you want to survive in a new market. Adapt to your audience's demands and don't be so set on your approach that you can't change tact when you feel the market begin to shift.
Market assessment is an important part of business growth. Once you've identified the risks of your new market, you'll be able to prepare for those challenges in your business plan and gain a stronger foothold in the industry. Also, by asking the right questions upfront, you can better seize opportunities as they arise.
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Alison Wild BCom (Hons), MAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has over 20 years' experience as a residential landlord.
Date: April 13, 2016