If you’ve exhausted growth opportunities in your market, it might be time to find a new market vertical.
These tips can help you find and evaluate new market opportunities for your business.
With vertical integration, you look at your supply chain to determine if you can be more involved in your industry by investing in the infrastructure.
These questions can help you explore potential opportunities for a new market vertical:
- Can you take over one of your main suppliers to control the flow of materials and save costs?
- Can you buy directly from manufacturers and become the wholesaler to other businesses (as well as your own)?
- If you sell to other companies, can you buy them to have guaranteed customers?
- If you’re a wholesaler, can you add a retail outlet and start selling directly to your end-user?
With horizontal integration, you find new markets by opening new businesses in different areas.
- Buy competitors or complementary businesses.
- Franchise your business.
- Open new branches or stores in new regions.
- Agree to sub-contract to other companies.
Finding a new market can be replicating what you’re already doing somewhere else.
New business models
Another way to find new markets? Adopt a new business model.
Here are some ways you can do this:
- Get people to resell your product or service.
- Find online platforms that bring buyers and sellers together.
- Offer a subscription model where customers commit to recurring payments to receive defined products or services.
- Offer a license or royalty model for your intellectual property if you protected your innovation through a patent, copyright, trademark or trade secret. Can you license your innovation or technology to a third party?
- Creating an advertising model by presenting news, information or features that attract an audience. Sell advertising space to businesses that have a message for that audience.
Offer pre-paid services
If you provide services, can you introduce fixed-rate service agreements rather than charging fees by the hour?
The fixed-rate business model aims for predictable cash flow in advance. Customers pay by direct debit. (You automatically pull payments from their financial accounts through your financial institution.) Doing this eliminates invoicing costs and debt collection issues.
Here’s how this might look:
- An accounting firm offers accounting services at $500 per month, regardless of the activity level. The firm gains a reliable revenue stream, predicting that many businesses won’t use $500 worth of services each month.
- An IT business offers a 24-hour help desk service for $200 per month, regardless of whether it’s used.
How could you charge fixed monthly service levels with your business?
Overseas markets offer opportunities to expand your business.
But there’s a lot to consider. Exporting can be both risky and highly rewarding, making research crucial.
Conduct high-quality, on-the-ground research in any country you consider. Find out what regulations, tariffs and business risks are present in your new target market.
Explore B2B or B2C
If your business focuses on selling to consumers (B2C), consider whether your goods or services could benefit other businesses (B2B).
Are there opportunities within the government or education sectors?
You might need to tweak your business slightly to appeal to the new market. Businesses and consumers have different pain points, problems and priorities.
Consider whether you need to adjust your marketing and pricing to address these differences and position your business as the solution.
Finding new customers and markets can open the door to business growth. But a new market vertical requires careful planning and action.