Target Market Sizing is key for business and marketing planning, and budgeting for all startups, especially when seeking third-party financing. A diligent preparation makes sure, that you go-to-market in the right niche.
Germany is an attractive market, but different than your home market. Ignoring this fact puts your operations at risk. According to CB-Insights, the Top Reasons For Failure are caused by an unclear understanding of the requirements, leading to not targeting a market need and running out of cash.
Market Sizing tells you about the
- Total Addressable Market, Entire chain of buyer/seller relationships Value of the relationships at the point of consumption
- Served Addressable Market. The part of the Total Addressable Market for which your business model’s value proposition is strongest. A Value Proposition rarely applies to an entire Total Addressable Market. Sharpen your focus on a particular part of the market
- Target Market. Served Addressable Market segment with the most direct path to success.
A product that sells well in your home country may not necessarily have the same appeal elsewhere. While the business environment won’t be identical to your home country, you should be familiar enough with the market for smooth business discussions. Take into consideration trade barriers, currency, and culture
The challenges of an international business
Expanding internationally comes with its own unique set of obstacles. Expect language and cultural barriers. You will have to understand the different ways people communicate. Different tax codes, business regulations and packaging standards in different countries
Pace of Business
In Germany, doing business is as much a personal event as it is professional. You have to be patient and prepared for multiple interactions to build trust. There´s a local competition. Why would [customers] buy from you over the local champion?
The right partners
Find the right partners and team. If you expanding in Germany, you’ll want the right partner. You’ll want someone you trust.
The right team
The people you hire to deal with your overseas business partners and customers must be fully immersed in the local environment but should also be looking out for your interests.
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