As an entrepreneur, change is a constant in your line of work. Sometimes, branching out to a new market is essential for both business and personal growth. While it’s a bold move and it can result in growth and profit, the transition can be fraught with complexities if not properly planned. Here are four tips that can help you branch out into a new industry.
Study the Market
This practice is a given, yet its importance cannot be overstated. Research what catalysts, risk factors, and customer profiles drive the industry. You should also figure out what the numbers are, such as overhead costs, average fixed and variable costs, break even point, gross and net profit margins, and revenue growth. Having a good understanding of a market is essential for those looking to enter it.
Observe Competitors
Businesses that are already well-established in the industry you’re looking to move to can be a wealth of information if you know what to look for. Observe what advertising channels they use, what key demographics they serve, how they package and fulfill their customer orders, how many people they employ, and so forth. By learning from your competition, you are less likely to make the same mistakes they have made.
Transition Slowly
Allowing yourself enough time to branch into a new industry is needed to study the new market you’ll be venturing into and liquidate your current business, if you are looking to completely shift your focus. You’ll want to make sure your current business’ assets are sold at the best possible prices. A slow transition will also spread the costs of creating your new business, especially if you are maintaining operations within multiple industries.
Get Someone Who Knows the Industry
Surround yourself with people who are experts in the new industry that you’re looking to enter. Family, friends, colleagues or people you network with at conferences and meetups might already have an abundance of industry knowledge that you can use yourself. What’s great about finding people who know the industry versus just reading about the industry is that you can ask highly specific and situational questions and get answers almost instantaneously.
Jumping into a new industry can create new opportunities for profit and growth. However, it can be a high-risk maneuver that could drain your resources if executed poorly. Use the tips above to establish good footing before taking a big leap.
our tips that can help you branch out into a new industry.
Study the Market
This practice is a given, yet its importance cannot be overstated. Research what catalysts, risk factors, and customer profiles drive the industry. You should also figure out what the numbers are, such as overhead costs, average fixed and variable costs, break even point, gross and net profit margins, and revenue growth. Having a good understanding of a market is essential for those looking to enter it.
Observe Competitors
Businesses that are already well-established in the industry you’re looking to move to can be a wealth of information if you know what to look for. Observe what advertising channels they use, what key demographics they serve, how they package and fulfill their customer orders, how many people they employ, and so forth. By learning from your competition, you are less likely to make the same mistakes they have made.
Transition Slowly
Allowing yourself enough time to branch into a new industry is needed to study the new market you’ll be venturing into and liquidate your current business, if you are looking to completely shift your focus. You’ll want to make sure your current business’ assets are sold at the best possible prices. A slow transition will also spread the costs of creating your new business, especially if you are maintaining operations within multiple industries.
Get Someone Who Knows the Industry
Surround yourself with people who are experts in the new industry that you’re looking to enter. Family, friends, colleagues or people you network with at conferences and meetups might already have an abundance of industry knowledge that you can use yourself. What’s great about finding people who know the industry versus just reading about the industry is that you can ask highly specific and situational questions and get answers almost instantaneously.
Jumping into a new industry can create new opportunities for profit and growth. However, it can be a high-risk maneuver that could drain your resources if executed poorly. Use the tips above to establish good footing before taking a big leap.