For companies with strong cash reserves or access to capital, today’s economic environment may offer promising opportunities to expand. In fact, 39% of middle market executives said they expanded into new domestic markets over the past 12 months and see more expansion on the horizon, according to The Middle Market Indicator, a recent report released by the National Center for the Middle Market (NCMM)1.
With a majority of middle market companies reporting year-over-year gains in 2021, additional expansion activity included 55% of companies expanding into new markets with the introduction of new or improved products and services; and 26% adding a new plant or facility2.
Still, it is important to lay the groundwork for expansion carefully. When expanding into new markets, successful entry requires a thorough understanding of a market, the potential competitive barriers and risks a company might face, and the tools to mitigate those risks. In the current environment, companies may need to develop a deep understanding of local economies, as well as public health and demographic trends.
How key economic indicators show a new market’s potential