Does it make the most sense to define your expansion by cities, countries, languages, ecosystems, or something else? Each city has distinct transit partners to integrate, a distinct set of terminology and localization requirements, and a largely distinct user base. Synergies across cities are small.
Step 1: Define the options
Companies such as Uber and Deliveroo are also largely defined around cities or metro areas since supply-demand network effects are almost entirely within cities. For a mobile games business, such as Wooga, the most important difference between markets is which distribution channels predominate. Taste in games is similar across these markets and the only localization required is some translation. The truly distinct large markets are China, Japan, and Korea, where partners such as Tencent, Line, and Kakao are far more important for distribution and require careful local cultivation.
For companies in insurtech and fintech, regulations and licensing are an important consideration in growth. In contrast, the 50 states of the US all have different licensing and financial regulations. Lemonade, one of the best-funded insurtech businesses, is an example of a company with a state-by-state growth plan.
How to decide whether to expand - The Business Journals
For most tech businesses, however, including SaaS, fintech, and eCommerce, the country unit is the best way to think about market growth. I will use a country-based structure for the rest of this post. Instead, think through what really matters to your specific business, along the following dimensions:.
Above: An example simple ranking matrix for a UK marketplace business expanding in Europe. Once an analyst or an intern has pulled together the data above ideally with a score and a ranking , you need to make a decision. Discuss it as a management team, and get input from your board. Some issues are nuanced, and some challenges can make countries complete non-starters.
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At the end of the day, thought, this is a decision for the CEO; it should not be made by consensus. Considering all the above will help you make a well-educated choice for your next business location. Although you can never predict if a new location will be successful, you can do as much research as possible beforehand to ensure it is the best available fit for your growing business. Give us a call. Type below and hit Enter To search.
5 Factors to Consider When Expanding Your Business Overseas
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Emily Suess is a contributor for Fundera and a freelance blogger and copywriter specializing in technology and small business. Latest posts by Emily Suess see all Business Credit vs. Identify Your Business Type The location you choose will depend on the type of business you operate. Make a List of Your Basic Needs In addition to overall building type and zoning regulations, there are a few finer points you need to consider.
A location that makes it easy for you to connect with your vendors and suppliers. Which location makes it easier and cheaper for you to get the raw goods you need to operate? A safe location. This is especially important for businesses with inventory that may be at a higher risk for burglary and theft.
A location with sufficient parking. Will your customers be willing to pay for parking?
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Or do you need a location that provides adequate parking spaces for employees and customers? Editorial Note: Fundera exists to help you make better business decisions. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone.