Winning new markets | Nov 10

Beyond borders: how to identify and research new markets

Winning new markets | Nov 10

How small businesses can expand overseas with confidence through research, planning, and cultural understanding

Ian Wylie Journalist, broadcaster, educator

Reading Time 5 minutes

For small business leaders, the idea of exploring new markets abroad can be both exciting and confusing. Expanding internationally can open doors to growth, innovation, and resilience, but only when grounded in rigorous research and a clear sense of purpose. So, what are the steps small businesses should take to identify and effectively research opportunities overseas?

Start with a clear plan

Begin with purpose. That’s the advice of Andy Miles, Help to Grow: Management alumnus and Managing Director of Leicester-based AS Miles Consulting. Since founding the business in 2015, AS Miles Consulting has expanded into Europe to help transport businesses across the continent navigate regulatory, operational, and strategic challenges within the sector. ‘Make sure you either know or have a basic plan of what it is you are looking for, what is your end objective,’ he says. While he accepts that a plan may evolve as research progresses, it must be clearly defined with each iteration. Without it, research risks becoming unfocused and inactionable.

Clarity doesn’t just mean knowing what you want, it also means why, whether that’s finding new customers, suppliers, or strategic partners. Once that’s established, Miles says small business owners should look at trusted sources to begin their research. In the UK, for example, his firm is a member of trade and business organisations including the Chartered Business Institute and Chartered Institute of Logistics and Transport, while also working closely with the Driver and Vehicle Standards Agency. Miles recommends identifying equivalent bodies in your target country, ‘They can give you a good steer on legislation, local laws and compliance, as well as access to the markets, or direct you to those sources.’

Go beyond the inbox

When it comes to building international connections, Miles has strong feelings about the best method of communication. ‘After some initial research and once you’ve identified organisations you wish to connect with, pick up the phone!’ he insists. ‘Email can help but people respond to people so much better, and in many countries email is seen as impersonal.’

Understanding where you’re looking to operate is essential also. ‘Understand the business culture in your target country so you can bridge the gap,’ he advises. ‘Explaining our culture and business customs can help so there aren’t any misunderstandings. This typically opens up the door for them to do the same. We’ve found that communication is so important.’ For small business owners, that means investing time in relationship building and being ready to adapt your approach to different expectations and norms.

Don’t take shortcuts

One of the biggest mistakes small firms make is rushing the research stage. ‘The biggest risks are a failure to understand how a compliance area is interpreted and enforced in that country,’ Miles warns. Even when regulations look consistent, their interpretation can differ. ‘Ask questions and listen before you decide how you wish to operate,’ he says.

Then stop and reflect before moving forward, ‘Once you have information, stop, review, and understand what that means to your business and how you may wish or need to deal with what you have learnt, then go to the next stage,’ says Miles. ‘It might take longer than you thought but good solid understanding now will save a load of potential issues later on.’

Miles recommends caution when it comes to third-party ‘introducers’ who charge fees to connect small firms with local contacts. ‘Be careful of companies that offer the world and need you to pay them for introductions,’ he warns. ‘If it sounds too good to be true then it usually is.’

Instead, he recommends joining official trade missions organised by government or trade bodies: ‘Look to government or trade body trips or trade missions to markets and countries, whether that’s the CBI, government, even the Lord Mayor of London.’ Such programmes, he says, can open doors and offer credibility in unfamiliar markets.

There’s no substitute for first-hand experience. Miles concludes: ‘Don’t be lazy in research, get off your backside and if necessary, go to the market, look at it, ask questions yourself,’ says Miles. And if that isn’t financially feasible, he suggests a reality check: ‘If you can’t afford to do that, can you really afford to be exploring that market and maintain a business presence out there?’

Use strategic tools

Mark Hart, professor of entrepreneurship and enterprise policy at Warwick Business School, highlights the value of structured frameworks in identifying international opportunities. ‘A simple Ansoff matrix [as taught in Part 1 of the Help to Grow: Management Course] is the starting point for small businesses when they’re trying to identify promising international markets,’ he says. The matrix helps map growth options into the quadrants of market penetration, product development, market development, and diversification. It shows how each combination of products and markets carries different levels of risk and opportunity.

Hart also uses the VRIO framework to help businesses assess whether they have the capabilities to succeed abroad. It helps evaluate whether resources are valuable, rare, inimitable, and organised, and therefore able to sustain a competitive advantage.

Like Miles, Hart points to the value of government initiatives but also networks. ‘Export Champions in the UK are a terrific source of advice,’ he says, noting that many SMEs benefit from working with officials in the Department of Business and Trade and particular, the UK Export Finance team. If doing this for the first time, peer networks, like those provided by the Alumni Network or Export Academy are ‘crucial to help build confidence and share experiences.’

Finally, Hart offers a warning: ‘Not understanding business culture in your chosen export or international market can lead to a copy and paste mindset.’ Just as Miles advises, cultural awareness and adaptability are vital to success.

Ian Wylie Journalist, broadcaster, educator

Ian Wylie is a journalist, editor, and broadcaster for the Financial Times, Guardian, BBC, Monocle, and others. For 16 years he was a staff writer, feature writer, and section editor at The Guardian newspaper. He also teaches on Newcastle University’s undergraduate and postgraduate journalism programmes.

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