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The Cost and Risk of Entering New Markets
Entering new markets is time-consuming and costly. Let's consider an example - the cost and time to set up an regional office in Singapore to recruit regional local partners
One Time Costs -
Recruitment of local manager = S$60,000 = US$46,000
Ongoing Costs -
Office space S$48,000/year = US$37,000 / year
Local manager = S$300,000 = US$230,000 / year
Support staff = S$40,000 = US$31,000 / year
Travel and expenses = S$50,000/year = US$38,000 / year
Total ongoing costs = US$336,000 / year or US$84,000 / quarter
Best Case Scenario - First Revenue at Q7
Senior exec appointed in Q2
First reseller appointed in Q3
First deal closed in Q6
First payment in Q7
Accumulated investment before return = US$550,000
Realistic Scenario - First Revenue at Q10
Senior exec appointed in Q2
First reseller appointed in Q4
First deal closedin Q9
First payment in Q10
Accumulated investment before return = US$802,000
Worst Case Scenario - No Revenue
Senior exec appointed in Q2
First reseller appointed in Q
No revenue
Accumulated investment by Q10 and nothing to show for it = US$802,000
We take on the following costs and risks for you -
Non-performing staff
Investing in staff that leave
Non-performing resellers
Product not suitable for local market
You get new market access with no upfront costs
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