A thrilling aspect of owning a startup can also be the most daunting: tremendous risks. Such businesses often plant their seeds in foreign soil, anticipating the results for lengthy periods.
For at least 90% of them, their efforts fizzle out into the land of oblivion. The remaining 10% bravely advance, gradually expanding into new markets. If your startup has reached this stage, it’s no small feat in today’s world of ruthless competition.
However, the road ahead is not smooth, as a new market brings even more uncertainties and challenges. What can be done when the stakes are high and the budget is limited? Keep reading, as this article will discuss four ways to grow your roots deep into new markets despite lean funds.
Start Small With Market Testing
When someone is literally testing out new waters, it is not recommended that they dive headfirst. The surface may appear clear, but the depths are not always easily gaugeable. A new emerging market is an unfamiliar territory requiring a cautious and measured approach.
In other words, startups need to start by dipping in their proverbial toes before they get neck-deep and risk drowning. So, start with market research to understand the new area’s demographics, shopping behaviors, customer pain points, etc.
The Small Business Administration of the US recommends commencing your research with demographic data. This would include population info on age, family, wealth, interests, or anything else that may be relevant to your business.
You can ask the following questions to gain a better sense of the market –
- Is there a desire or potential for desire for your product or service?
- How many people are likely to be interested in your offerings?
- What is the income range and employment rate?
- How many similar options are already available in the area?
- Why do potential customers pay for the alternatives?
The testing process does not have to be expensive. You can run targeted online ads in the region of your interest or create localized landing pages to measure engagement. Also, try offering pre-orders and interest signups to gauge potential demand.
Use a Virtual Address As a Professional Alternative
Oftentimes, market research highlights key gap areas where a startup may find fertile grounds for business. Making the most of that opportunity only proves to be unreasonably challenging and pricey if done the conventional way.
Businesses try to establish a fixed physical office for better credibility and a strong local presence. The good news is that this may not be necessary, especially in the digital age. You can have a legitimate local business presence without buying or leasing a commercial property in the new city.
Just use a virtual address as a professional alternative. The Farm Soho points out that a physical street address qualifies as a legal address, ensuring compliance with various regulations.
Your virtual mailbox business address will replicate a real physical address, offering the advantage of a solid professional image without overhead costs. This provides immediate access to the new market along with security and easy mail handling.
Here’s how you can make the most of your virtual business address for a strong professional presence –
- Choose an address that aligns well with your business image and target market.
- Prioritize a reputable provider offering comprehensive services like mail handling and meeting spaces.
- Use the address strategically on marketing materials and virtual phone systems.
Leverage Local Partnerships
The McKinsey Global Institute published a rather interesting report. It urged small businesses to think big, not by trying to build from scratch but through local partnerships. This advice made sense because small businesses across the US continue to struggle in terms of productivity.
Startups, although not similar to small businesses in many ways, can leverage this invaluable piece of advice. There are many benefits to strategic local collaborations, including –
- Access to local knowledge and expertise
- Opportunity to tap into an established network and customer base
- Cost-effective market entry
- Increased credibility and trust
- Faster market penetration
- Better understanding of local regulatory compliance
There are many ways to make the most of local partnerships. A lot of startups opt for co-branding partnerships where two businesses collaborate to offer a product or service under both brands.
Even distribution partnerships are common where a startup collaborates with a local distributor or logistics company to distribute its product. Another great option is partnering with top relevant influencers who could help with business outreach efforts.
To maximize success, look for complementary businesses and start small with pilot projects. Focus on mutual value and building trust through transparency. Monitor and evaluate progress so you can adjust your strategies as and when needed.
Lean More Into Digital Channels
Since this article is all about entering new markets on a budget, startups cannot afford to forego digital channels. Did you know that 45% of customers visit a business’s physical location after finding it online?
Conversely, 76% will look into a company’s website before visiting the physical store. Don’t worry if your startup may not have a physical location in the new city. The purpose of mentioning these stats is to establish the importance of digital media.
A strong digital presence and marketing tactics can help you become more credible and reach a wider audience in the process. Cost-effective to run and maintain, digital ads can be leveraged to reach new audiences efficiently.
You have plenty of scope in the form of targeted advertising, broad market reach, and ongoing engagement. Let’s see how you can use this tip to your advantage –
- Focus on social media marketing across platforms like Twitter, Facebook, and Instagram. Target specific demographics and use low-budget ads along with organic posts and relevant hashtags.
- Create valuable, shareable content that can be repurposed across multiple platforms (social media, website, etc.).
- Partner with micro-influencers for more authentic brand promotion.
- Implement local SEO strategies through relevant keywords, Google My Business profile, and more.
- Engage in online communities and forums to introduce your business naturally.
Strategic business expansion is not so much about the spending as it is about the precision of your approach. Startups can cultivate resilient roots in unfamiliar terrain only when they anchor themselves in agile alliances, digital touchpoints, and market-savvy tactics.
Whether you wish to get a firm footing within the US or beyond the national borders, apply the strategies we have discussed. They may not guarantee a steep upward trajectory.
This is because lasting growth is often like the rise of an oak tree. Though its growth is slow, its presence is often unshakeable. Even in business, startups that progress slowly (but steadily) stand the longest.
