Do you have trouble identifying new markets to enter? This process can help you uncover and prioritize the best opportunities for business growth.
At Avondale, we are continually seeking new opportunities to build and grow businesses for ourselves, our partners and our investors. After we use a fact-based approach to identify attractive markets in which to invest, the next step is developing a robust pipeline of opportunities. While we are continually refining our methodology, we've found that there are generally five important steps you can take to ensure that your pipeline never runs dry.
1. Understand the Market
If you don't take the time to understand the market in which you are investigating new opportunities, you will inevitably fail. By analyzing all aspects of a market, from the key value drivers to the major (and minor) players competing in it, you have a better chance of identifying areas where you can leverage your core competencies to develop a strong value proposition that is attractive to others.
2. Identify the Relevant Channels
Once you have built up the requisite domain expertise and have narrowed down the areas in which your organization can add value, you must identify the various channels that will help you capture the opportunities. Each channel will require a different level of investment and will vary in terms of return on investment, so it is important to take a balanced approach to ensure that you are spending most of your time on the opportunities with the most potential.
3. Leverage Your Existing Network
Many of our readers are entrepreneurs who are skilled at leveraging their networks and do so often. However, when you are focused on a new platform or new product, it is important to bring this up regularly in conversations, however briefly. Just because you are looking for an opportunity in the healthcare space doesn't mean you should just reach out to the 10 healthcare-focused individuals who you know. Instead, reach out to the other 50 people with whom you have a trusted relationship because, if they are like you, each of your contacts may have 10 contacts who may be able to refer you. Five hundred potential introductions is far better than 10.
4. Establish Your Presence
Attend major trade shows and conferences, walk the exhibit floor and talk to as many people as you can. Not only will you gain a better understanding of the market, but you will begin to cultivate valuable relationships. After attending a few conferences, you may start to see the same familiar faces and if you've built a rapport with these individuals, you'll earn credibility as a peer who people will want to go to when they have a need to fill.
5. Test and Learn
Periodically keep track of where you are seeing more traction versus less. As investigating new opportunities is often a balancing act, keep track of where you are seeing success and re-prioritize on a continuous basis. In addition, if you've been effective in the steps above, you'll continue to not only identify ways to proactively uncover new opportunities, but you will begin to see unexpected opportunities coming your way.
KARL STARK AND BILL STEWART are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree. @karlstark