Market entry

How to choose a market for expansion

A checklist for a confident decision

Dima V. Nechyporenko, the nech · 20 September 2026 · 9 min read

Why does market selection worry companies most?

Because getting it wrong costs three resources at once: money, time and the attention of the team. None of them comes back if the market turns out to be the wrong one. That is why owners ask this question first, before any talk of budget or headcount.

For most small and mid-sized companies, entering five markets at once is physically impossible. Even two in parallel often means the owner and the sales lead spend half a year travelling while the home business runs on autopilot. Choosing one market means giving up another for a year or two.

SMEs also carry the bulk of the export risk. According to Eurostat, small and medium enterprises account for 97.1% of exporters in intra-EU goods trade but only 39.4% of export value (2024 data). There are many such companies, each with limited resources, so one wrong choice is expensive.

In our experience the fear of picking the wrong market breaks down into five specific questions. Each has a working answer.

How do you narrow the list to two or three markets?

Do the homework before spending money. The first pass uses coarse filters to remove markets where nobody is waiting for you, the second leaves three candidates, and deep analysis plus conversations happen only with those.

A handful of filters is enough for the first pass: the size of the segment you care about, logistics, trade agreements, price and competition levels, language and business culture. Expensive reports are not needed yet. What is needed is an honest table where every market is scored against the same criteria.

Once two or three markets remain, the work becomes human. Market data is identical for everyone, and the difference comes from what practitioners on that market will tell you. We rely on four sources:

1. Your own contacts. Clients, suppliers and acquaintances already working there. They say what no report contains.
2. Industry associations. They know the players, the trends and who recently entered or left the market.
3. Chambers of commerce and trade missions. They provide first contacts and a view of the formal requirements.
4. A trusted adviser on the ground. Checks the market for you, talks to buyers in their own language and returns facts rather than impressions.

We described what such research looks like phase by phase in “Market entry discovery: four phases”, and why conversations beat reports in our piece on entering a new market through direct contacts.

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Does success at home guarantee demand abroad?

No. The fact that your product or service sells well at home, or in one foreign market, does not mean it will work the same way elsewhere. The product-market fit check is part of choosing the market, not a separate step that follows it.

In practice we see two scenarios. In the first, the product is wanted but the offer needs adapting: different packaging, different payment terms, a different argument in the sales conversation, a different price bracket. That is normal work and it can be planned.

In the second scenario the product is simply not wanted. The reason may be buying culture, solutions the buyer is already used to, or the fact that the problem you solve at home is not seen as a problem there. No adaptation fixes that, and the earlier it becomes clear, the cheaper the lesson.

The question is not whether the market is big. It is whether the market holds a buyer who has our problem and is willing to pay to solve it.Dima V. Nechyporenko, founder of the nech

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How do you test a business hypothesis before opening an office?

State in one sentence why your product and your value proposition fit this particular market, then test that statement with 20 to 30 buyer conversations, a targeted outreach campaign or a pilot. All of it before you rent an office or hire a local team.

A good hypothesis has three parts: who buys, what problem you solve and why they choose you over a local supplier. For example: “Mid-sized construction contractors in Poland will buy our structures because we deliver in three weeks and local producers take six.” That statement can be confirmed or disproved.

Marketing and business development tools for the test:

• conversations with 20 to 30 prospective buyers in the target segment;
• targeted outreach in the local language with one clear offer;
• a test advertising campaign or a landing page built for that market;
• an industry trade show with meetings booked in advance;
• a pilot shipment or a pilot project on favourable terms.

The result gives you what no analytics can: a real market response based on practical data. If thirty approaches produce no interested reply, that is an answer too, and it costs dozens of times less than a year of a local team.

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Which KPIs show that the market was chosen correctly?

The ones you wrote down before the start. A company should define in advance what it expects from the market in years one, two and three, and which result will signal a mistake. Indicators invented along the way are almost always bent to fit what happened.

An indicative frame, which we adapt to the industry and the length of the sales cycle:

The numbers in each row come from your business model. What matters is that they are written down before the first investment, along with the review date. Then the decision to scale, adjust or exit is made on facts. How these KPIs fit the wider company plan is covered on our business strategy page.

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Which regulatory and customs barriers should you check first?

The ones that can stop sales for a year or more: licences, certification, tariffs and restrictions on materials or components. This formal block is usually left for later, and it is the one that most often breaks an otherwise finished entry plan.

The typical situation looks like this. A company settles on a target market, confirms that its offer is competitive, and only then learns that the product needs one or two years of certification there. The entry budget is spent and selling is still not allowed.

To avoid that, we check five questions per market while the shortlist is still open:

1. Is your activity licensed or otherwise regulated in the target market?
2. What certification does the product need, how long does it take and what does it cost? A CE mark does not always travel outside the EU.
3. Are there protective, anti-dumping or other duties on your tariff code?
4. Are there restrictions on the materials or components used in your product?
5. Is there a trade agreement between your country and the target market, and what does it change in your price?

If even one answer is “a year of certification” or “a 25% duty”, that does not necessarily rule the market out. It does change the plan, the budget and the first-year KPIs, and it is better to know before you promise first sales to a board or an investor.

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Strategic partner or your own entry: which one?

A partner lowers risk and speeds up entry, your own operation keeps control of the customer and the margin. There is no universal answer: the choice follows your strategy and the conditions of the specific market, which you see only after detailed analysis.

A strategic partner is a company for which you are a complementary element. An engineering firm that does not offer your specific service can include it in its package, and you move through the market together. Or a wholesale distributor buys your goods and moves them through its own network.

These models often run in sequence: the first year through a partner to verify demand and price, then your own presence once the volumes justify it. How we find and vet such partners is described on our market expansion strategy page.

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What does this look like in practice?

An industrial equipment manufacturer came to us with five EU markets on the list and a budget for one. Within a few months the six checklist steps left one market to enter and one in reserve. The company name is withheld by agreement with the client.

The first pass through coarse filters removed two markets: in one the target segment was too small, in the other two local producers held the market on long contracts. Of the three that remained, one failed the regulatory check, because national certification would have taken about a year.

For the two finalists we ran buyer conversations in the local language. In one market the hypothesis about delivery times held and the first requests for quotes appeared. In the other, buyers valued on-site service more than speed, and without a local partner that market would not have opened.

The client entered the first market through a strategic partner from the engineering sector and fixed KPIs for 12 months. The second market stayed in reserve. Five options became one, with data instead of assumptions.

Frequently asked questions

How many markets can you open at once?

For most small and mid-sized companies, one, occasionally two. It is worth analysing two or three in depth, but entering fully in one and keeping the rest in reserve.

How long does choosing a market take?

A shortlist plus the first buyer conversations usually take one to three months. That time costs far less than a year spent on the wrong market.

What if the first-year KPIs are missed?

First find the cause: the wrong segment, the wrong offer or the wrong market. The first two are fixed by adjustment, the third means moving to the reserve market on your shortlist.

Do you need a legal entity in the new market at the start?

Usually not. Hypothesis testing and the first pilots can run from your existing entity or through a partner. Registration makes sense once demand is confirmed.

Why hire an adviser if there is a chamber of commerce?

A chamber gives contacts and a general picture. An adviser runs conversations with your prospective customers against your hypothesis and returns a yes or a no with the reasoning.