A new market entry plan for a regional company

A company that is strong in one region and thinks of the next often does the expensive thing first: rents a space, hires a manager, prints a brochure. A safer plan runs the other way. You spend in three gates, each with a cap written beforehand, and you pass a gate only when a stated thing has happened. This post lays out the gates, what to write down before each, and how to choose between two candidate markets. For a city-specific version of the same question, see how to enter a new city.

Gate zero: pick the candidate on paper

Write down two or three places or buyer groups and answer four questions about each, in plain sentences. Do buyers there already pay for what you sell? Can you reach them from where you are, by road or through a partner? Does anyone there know a customer of yours? Can you serve them with the delivery and after-sales you have today?

Cross out any candidate with two noes. Between two that survive, prefer the one with a customer of yours nearby, because a buyer in a strange town trusts a name they can phone. Size of the city comes after that.

Then count. If you cannot list a hundred plausible buyers by name, the place is too thin for a field effort. How to size a market before you enter it shows the counting.

Imagine: a trailer maker in Mehsana looking at Madhya Pradesh

Imagine, as an invented example, a fabricator in Mehsana who builds tractor trailers and tippers for farmers and contractors across north Gujarat. Orders at home have flattened. Then a dealer friend in Indore says buyers there complain about waiting for trailers, and the owner starts to plan a depot.

On paper, Indore scores well on demand and badly on service: a trailer with a cracked drawbar needs a welder the same week, and the owner has none within a day's drive. A second candidate, the districts of southern Rajasthan near Udaipur, scores lower on demand but a Gujarat customer of the owner already runs a hire fleet there.

The first plan was a rented yard in Indore and a hired manager, close to a year of fixed cost before the first order. That plan did not survive the questions.

Gate one: sell without building (cap: travel and samples only)

Write four lines before you leave home:

1. The offer. The exact product and the price you would quote at home. No special rate.
2. The target. How many buyers you will meet, for instance thirty from your list.
3. The pass mark. For example, five signed orders or ten firm quotations asked for.
4. The cap and the date. The most you will spend on travel and demonstration, and the day the gate closes.

The Mehsana owner chose southern Rajasthan first. The gate-one cap was a number the accounts person could say aloud: the cost of the trips and two demonstration trailers moved on the firm's own truck. No yard. No manager.

Illustrative: if the cap is what one ordinary trailer earns, say ₹60,000, a failed gate costs one trailer's profit. Not a year's rent.

Gate two: stay light while orders arrive (cap: a part-time presence)

If the pass mark is met, do not build. Appoint a dealer or a retired service welder on a retainer you can end, and keep selling from home. The question this gate answers is whether the orders repeat and whether you can serve them. Write the pass mark again: a second order from at least some of the first buyers, and one repair handled within a time you are willing to promise your customer.

It is easy to skip that last test. Selling is quick to try, but servicing is where a new market shows whether it was ever yours.

Gate three: commit only against a number

A fixed base is justified by orders, not by hope. Write the number of orders a month at which a yard pays for itself, taken from your own costs, and agree that nobody opens it below that line. If the level is never reached, you have a market you serve from home, which is a perfectly good outcome.

What to do when a gate fails

• Few meetings. The list or the introduction is wrong. Change who you ask, not the offer.
• Meetings but no orders. Ask each buyer for the reason and write it down. If most say "we already have a supplier", try a smaller first order. If most say price, check your freight before you cut.
• Orders but no repeat. Fix delivery or service before spending anything more.

Decide before the gate whether you will extend it once. A second extension is a no for now. Money already spent is no argument for going on, though it will feel like one.

Who minds the home market

It is easy to forget that your own time on the road is a large cost. Name the person who runs the home orders while you travel and write down what they may decide alone. A good customer at home who hears nothing for three days may tell you, loudly, what the trip cost.

When this staged plan is the wrong tool

A low-priced product sold through distributors cannot be tested on thirty buyers. Test with one distributor and read their reorders. If the sale needs a licence, a state approval or a local rule, check it first with your own adviser, since requirements differ by state and body and change.

Write the pass mark before you book a ticket

Put the four lines for gate one on a single sheet. Show it to whoever keeps your accounts. If they cannot say the cap aloud, it is not a cap. New market entry strategy is the service for this plan, and whatever you spend after gate three belongs in your marketing plan for that place. If you have two places in mind and cannot choose, tell us what you need.