Dealing with a new market, adapting a certain business model on an unknown area and executing a venture is almost unimaginable, even in this world of contemporary business. Despite all the data available, and all the analysis that one can perform and count on when considering expansion beyond one’s zone of comfort, a great deal of risk is involved in so many aspects that the procedure becomes almost discouraging.
Of course, preparation is everything, and a general rule is to always have a backup plan for any possible situation. The translation of the business plan to different market will be an ongoing problem for quite some time even after the initial period and upon the realization and establishing a business on the new market.
For in-depth analysis, and as a study example, we will discuss in this piece a business enterprise of Mr. Neil Emilfarb and his Stratex Investment Group. A case at hand is the project of Dukley Gardens in the country of Montenegro, on the Balkan Peninsula.
The History behind Mr. Neil Emilfarb and the Stratex Group
As a successful US businessman, Mr. Neil decided to invest in an internet providing company in Uzbekistan, back in 2002. His initial business was a well developed franchise of a dry cleaning service, with shops working all throughout the States, so when we are discussing entering a new market, we can positively state out that this particular entrepreneur had more than enough experience prior to the case at hand. An undertaking of a whole different market is a venture demanding enough by itself, but when we consider the fact that expansion was based upon a completely different type of industry, the success is almost surprising. Surely, after accomplishing a colossal task, such as this one is, one can feel encouraged enough to conquer anything. This leads us to the complex of the Dukley Gardens, and property investing in Montenegro.
The Development of a Business Plan
There are six steps of preparation when we are considering expanding on a new market. Upon execution, the following steps should be mended and consulted regularly, as a part of a quarterly review. This plan should be entirely developed before starting a business, or investing, with consideration of transferring to a foreign market.
In simple terms, one should answer a need, and not create a possible solution for non-existing problems or potential wishes. Trying to implement a completely new product without a prior consultation of the target market is simply irresponsible to your funds and your potential partners. Conversely, a company considering expansion should always insist on translating well proven models on a different market. In even more simple terms – we are trying to sell a product to a completely different type of consumers.
A case at hand deals with property investing, and as we all know there will always be a profit in bricks and mortar. So as far as certainty goes, this line of industry is very lucrative no matter the market. The target buyers, however, should be addressed within your pricing strategies.
Again, an aspect that is complex enough by itself, which should be thoroughly examined and implemented with special care in this particular situation. It requires a thorough data analysis, with all of the risks calculated in the model, to establish a final stream that will drive anticipated revenues. Here you can find the basics of pricing strategies.
In this strategy, executed successfully by Mr. Neil Emilfarb, more than a favorable factor was the location and accessibility to the Dukley Garden residences via Adriatic Sea and the Dukley marina. With its unique location, and counting on the fact that this country is in a transitional period, Mr. Neil was able to limit his investments in a reasonable range, advertise the luxury complex to European businessmen and millionaires, and thrive on great profit. We can label this pricing strategy as a premium one. From this short summary, we can easily realize how a wide range of aspects affects not just the price of a particular product, but also relates to a target audience. Of course, we have to consider additional costs into the equation.
This part concerns marketing, inventory, shipping, etc. The great thing about additional costs is that a company can be certain and establish almost an exact figure before making an investment. All data is easily comprehensible, easily calculated and precise, and although this sum doesn’t add up to the final cost in such a great deal in most cases, knowing that you have at least one figure that shouldn’t change drastically provides an insight of value when you are considering expansion.
Factors of risks should come with an obligatory insurance coverage, especially political ones. This is one additional cost that you shouldn’t avoid at any cost.
Legal and regulatory requirements
Having a legal advisor in the country you plan to expand to is an essential feature. The data gathered is more than helpful, in fact, it should serve as a driving force, but at the end of the day it all comes down to a human factor, which is often misread. The case at hand provides a great example, since the regulatory system of this particular country is somewhat new, and imperfect. Any advice offered by a local will help as a form of guidance, but also as a great illustration of cultural differences and what you can expect in this market.
Having that said, all legal paperwork, all permits and all regulatory forms should be honored and attended in time. The last thing an investor needs is legal troubles. Inspect everything thoroughly, and save no resources in making sure that all requirements are addressed and valid.
At the very end, the time comes to draw the line and make a decision. Be aware that every serious profit requires hard work. There is no way around it, if that figure adds up to a sum that will encourage you to embark on this venture, be also prepared to invest some hard work and time in it as well.
Mr. Neil Emilfarb followed the pattern above, and ended up with an immense turnover. It took courage, not just funds, and although his projects stand strong and are bringing that revenue stream straight to his pockets, he still faces a lot of work and consistency to finish what he started.