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Grow Your Business: New Markets

Grow Your Business: New Markets

Most businesses seek to expand into additional markets in order to leverage current success, enjoy economies of scale, grow revenues and products, and create a more stable business model. If you're considering expansion, either targeting new territories or new customers, the odds are you've enjoyed some level of success in your current market. You know your market, know your customers, and know how to serve that market and those customers.

Entering a new market is less comfortable. In effect, you must prove yourself to an entirely different customer pool. On the other hand, you don't have to re-invent the wheel. Your goal is to determine ways to extend your current operation into new markets.

Let's look at two new market efforts: geographic expansion and customer expansion.

Geographic Expansion

Geographic expansion is the most common way to enter new markets. This includes taking your business online since, by definition, online sales open you up to as broad a territory as you choose.

If you decide to expand geographically, start small. Stick to what you know well. If you run a restaurant in a relatively small town, choose another small town with reasonably similar demographics, customer profiles, and household incomes.

It may be tempting to transplant a successful operation to an area with a massive number of potential customers, but that strategy can also be risky. By sticking to markets with similar characteristics, you limit the risk of the unknown and make it more likely that you can run your new operation using similar practices and procedures.

In short, the closer a new market is to what you already know, the greater your chances for success. While you may want to become an overnight national brand, take small steps and leverage each achievement. The same is true where e-commerce is concerned; marketing to a worldwide audience can be expensive, even on the Internet.

Before you expand:

Customer Expansion

Expanding your business does not always require setting up new locations. Often, you can grow your business by targeting new customer segments in your existing territory.

Start by evaluating current customers. What products or services do they consume and what needs do those products and services meet? Then, think about other customer segments that could enjoy similar benefits.

Can you adapt to meet the needs of different customers? For example, if you provide heating and cooling services for residential customers, can you offer emergency service? Or could you expand to serving small business owners who feel the cost of using industrial-level service providers is too high?

The key is to change your offerings so you not only keep the customers you have, but also appeal to potential customers. Then, make sure you change your operations and systems so you can profitably provide the new service.

You also can achieve customer expansion by taking your business online. While, it's relatively easy to market to and serve new customers in this environment, competition is stiff. Your products and services must be differentiated or your business will disappear in the online clutter. Consider, then, how you can meet customer needs better, faster, or less expensively.

Before you expand:

Remember that expansion, whether geographically or into new customer bases, may take time to bear fruit. Most new businesses start slowly; so will new locations or new product or service campaigns targeting different customers. Monitor the results and adapt quickly. In time, you will know your new market and new customers as well as you know your existing ones.

The information included on this website is designed for informational purposes only. It is not legal, tax, financial, or any other sort of advice; nor is it a substitute for such advice. The information on this site may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate, in parts. It is the reader's responsibility to comply with any applicable local, state, or federal regulations, and to make their own decisions about how to operate their business. Nationwide Mutual Insurance Company, its affiliates, and their employees make no warranties about the information, no guarantee of results, and assume no liability in connection with the information provided.