Expanding into new markets can always be a challenge for startups as they work to navigate new challenges, find their target audience, and more.
According to the Startup Genome report on why startups fail, it was identified that 74 per cent of startups fail because they scaled prematurely. However, waiting too long to scale can also result in startups missing out on key opportunities that could lead them to success.
In this article, we highlight five signs that startups can evaluate to determine if they are ready to expand or not.
You have met or exceeded your goals
One of the biggest signs that you are ready to expand your startup is through your current status in your roadmap. When you are finding yourself in a position to meet your goals and milestones quickly, or you are repeatedly exceeding expectations, then the chances are that you are ready to expand.
When we talk about goals, we refer specifically to goals around customer growth, product validation, projected revenue and profit. When these areas and other goals specific to your industry and company are easily met, it could be time to explore the next steps.
You have experienced long-term profit
Profit is a key indicator of the health of your startup. If you are seeing sustained profitability over a long time, then this is a clear indicator that you have a sound business model and are doing things right!
This places your startup in a solid position to explore expansion as it will already be in a stable enough position to take risks with new markets and invest in market expansion.
Customer demand is increasing in other geographies
Seeing an increase in demand is always a positive sign; however, if you are looking for a key indicator to expand to a new market, take note of where this demand is coming from. If you are starting to see an increase in demand in a different geography, it would be strategic to consider that market as your next step for expansion.
Also Read: Scaleup Success: How can startups tackle the challenges of international expansion?
This could also be fueled by existing customers wanting to expand their use of your service in other regions, which could also help propel you into a new market as you would be able to prove your business model through them.
Your industry is growing and gaining traction
Another key indicator that your startup is ready to expand would be to look at your industry. You must understand your industry trends and use them to guide you in the direction you should go.
If you are to consider expansion, take a look at your industry in the different markets and garner key information that can inform your next move. This includes market saturation, potential customer base, potential market share, and more.
Another area to keep an eye on would be your competitors. If they are also growing, they too would be considering expansion and may indicate that the industry is gaining enough traction for you to explore other markets.
You have a strong, reliable, and stable team
Your startup’s team is important as the foundation of your business. Suppose you have seen stability in your team for an extended period, seen their strength in how the day-to-day elements of your business are run, and you have the confidence that they would be able to support you successfully as you enter a new market. In that case, you have a team in place for expansion.
Usually, your team should be people you can count on and passionate about your goals and committed to your success as much as you are if you can trust them to handle things while away, you are a step closer to expanding.
Final thoughts
These five signs have been valuable to us in identifying if startups are ready to enter new markets. If you are prepared to explore market entry, you have a few next steps to take:
- Start your market research and discovery and build up your reputation to approach your new target market.
- Find a partner in your target market that you could collaborate with for your market entry. This could be a local startup, a corporate, or another ecosystem player.
If you are interested in de-risking and accelerating this process, finding an accelerator or market entry program that focuses on your target market can support both steps above and save you time and improve your chance for success.
Interested in a new generation of accelerator programs? Explore Rainmaking Expand as they build modular and customised programs for the startups in their programs to tailor their market entry.
–
Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.
Join our e27 Telegram group, FB community, or like the e27 Facebook page
Image Credit: Rainmaking
The post 5 signs it is time for your startup to expand appeared first on e27.