As most business owners know, you cannot afford to stay in your "comfort zone" for long. New competitors can attack your market at any time leading to reduced sales and tighter margins. External factors can change the viability of your market overnight. Your past success does not insure future success.

Many of today’s businesses are electing to seek growth in other avenues. The three primary alternatives are to expand your current market, uncover new markets, or offer new products and services in new markets. In this article, we survey these three alternatives and the corresponding keys to success in your decision making.

Expansion in your current market involves providing new products or services within your existing market. The advantage to this approach is you already have an intimate understanding of the marketplace. You know the needs of the market and it is relatively easy to conduct your fact finding for a new product or service. The obvious disadvantage is something new must be developed. It can be something as simple as changing the look of your product with different packaging or styling or modifying the message of your product or service. Slightly more complicated steps would include adding new features such as customization or additional options. The most expensive and time consuming would be development of an entirely new product or service.

Uncovering new markets requires you to deliver existing products and services to previously untapped markets. These new markets could be comprised of geographically diverse groups or new customer groups. Opportunities could range from expanding regionally to internationally by adding shipping or offices in other cities. You could reach new customer groups by adding new salespeople or agency relationships. This approach requires no new product development and is frequently the preferred expansion strategy. International distribution is quickly becoming a reality for a greater number of small businesses. Some statistics suggest as much as 25% of global output is now exported with exports of merchandise and commercial services surpassing $7 trillion.

The third alternative is developing new products and services to be distributed in new markets. This is by far the most risky and difficult strategy and the least utilized. As you can imagine, tremendous resources and planning are necessary to tackle a new offering in a previously untapped market.

Action Step
Test market your new offering or new target market to determine viability.

As you consider your strategy, keep in mind the following three keys before you take action: research and plan, test market, and you must be able to move quickly.

It is imperative you approach this decision- making process just as you would in starting a new business. Research must be done and a plan prepared in at least three areas:

1) Product/Service Analysis – evaluate other products and services to assess their corresponding strengths and weaknesses.
2) Consumer Analysis – demographic, social, economic, and geographic influences.
3) Competitor Analysis – strengths, weaknesses, market share, and pricing.

The planning will provide the market confirmation or rejection you need before investing the required time and money. You will need to identify the current players and industry trends. What is your value proposition? Do you have a system for tracking results? Do you have the management and financial resources available to execute the plan? What is the current regulatory environment?

After planning, your next move is to test market. This will provide you with the final information for a go or no-go decision. Your test market may demonstrate the need and viability but it may be clear the timing is premature. You may determine to postpone your launch until a later date.

Finally, you must be prepared to take action quickly. Once your planning is complete, assemble your resources and take action immediately if your test market indicates a green light.

"You will never stub your toe standing still. The faster you go, the more chance there is of stubbing your toe, but the more chance you have of getting somewhere."
- Charles F. Kettering

Regardless of your strategy, use this opportunity to gain publicity to further enhance your likelihood for success. Implement a public relations campaign by contacting key media and building long-term relationships. Avail yourself as a resource and you may find the media can be one of your greatest assets as you seek to uncover new markets.

Mark Jordan is Managing Partner of VERCOR. Mark brings a unique, multi-disciplined approach to the mergers and acquisitions arena by drawing on his advanced tax strategies, estate, and financial markets knowledge. He also holds an MBA, BS in Business Administration, and numerous designations.