My business is digital, I do not need to have a local team in any city. Wrong!
If your business is online, the question you are probably asking is; why do I need to scale to other cities? We are on the internet; we are in every town in the world.
Well, that’s not entirely accurate. For most businesses – online or not – the presence of a local team with domain expertise goes a long way in increasing sales and getting exposure to a new audience.
How do you figure out when and how to expand out of your original location? Here are some pointers.
1. Find out if it is a big enough market
Before you launch in a market, look into the size of the market. Is it big enough to support the amount of resources that you will be investing into it? Does it promise a good return on investment? Who are your customers in this city and how many are they?
Beyond the size of the market, you also need to find and analyse indices that determine the ease of doing business in this new location. Also, decide what the marketing channel for your audience in this city will be. What kinds of marketing messages are they responsive to? You need to be doing a series of investigation to be sure the market will be worth your time.
2. Find out if the city wants you
The major question is: are you receiving service requests from that part of the country?
This is part of the marketing research, but it deserves a subhead of its own.
When customers have started asking for your product and are asking when you are coming to town, that’s a good-sized validation for your expansion.
Of course, regardless of demand, you need to compare the demand and its growth trajectory with how much you will invest in the market.
3. Get a good first hire
When you decide to move, the next bit of work is to find your first hire. This is an important job. If your product is one that relies on local adoption to survive, then it’s doubly so. For this position, you need to hire a solid person. At the minimum, they need to have a vast local knowledge and an understanding of the business and product. They should also possess operational skills; be able to work independently or with a distributed team, with little supervision.
The job of the first hire (we can call them City Managers) is to find and validate talent, and also drive the process in this new place based on local knowledge and your quality standards.
4. Create a minimum acceptable quality standard and replicate it in all your locations
Quality standards are the markings that set your business apart from the competition. You should set up this minimum acceptable quality in all your locations. It’s these quality benchmarks that will determine your activities in these new locations. Although parts of your process may be tweaked to fit local realities, the quality should never be compromised.
5. Focus on both ends of your marketplace
Beside people asking for your service – demand – how easy is it to access to raw materials to make your product in the new location? If yours is a service that relies on vendors (like Homejoy’s), is there a sizeable pipeline of cleaners willing to work with you?
6. Get your process right
You need to execute this before everything else. You are familiar with that startup mantra; “move fast and break things”. At the basic level, this is true. But as you begin to replicate your processes, you need to be sure the process is optimised (nevermind that you are committed to the agile startup model). You need to focus on doing it well, before doing it fast.
7. Track data and optimise your process
As you effect your expansion, you have to track learnings from your processes and identify peculiar emergent activities (or branch outs) introduced by local realities. Track these data, analyse them and use the result to optimise your processes. Always seek to improve your process. There is always something to improve
Featured image via Vennli