Market Expansion Decision Framework

Document Type: Guide
Version: 1.0
Last Updated: February 2026
Distribute To: Owner, CEO, VP Business Development

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Purpose

Provide a framework for evaluating and executing market expansion decisions, whether geographic, service-based, or client segment expansion.

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Types of Market Expansion

Expansion Options:

Type	Description	Risk Level	Investment
Geographic	New territories	Medium-High	Medium-High
Service	New capabilities	Medium	Medium
Client segment	New customer types	Low-Medium	Low
Vertical	Up/down supply chain	Medium-High	High
Project size	Larger/smaller projects	Medium	Varies

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Expansion Readiness Assessment

Pre-Expansion Checklist:

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         EXPANSION READINESS ASSESSMENT
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Company: _______________________  Date: _______________

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FINANCIAL READINESS:

☐ Profitable in current markets
☐ Adequate working capital
☐ Bonding capacity available
☐ Cash reserves for investment
☐ Debt capacity available

Financial score: _____/5

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OPERATIONAL READINESS:

☐ Current operations running smoothly
☐ Systems scalable
☐ Management capacity available
☐ Quality standards documented
☐ Safety program strong

Operational score: _____/5

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PEOPLE READINESS:

☐ Leadership bench strength
☐ Key roles can be filled
☐ Culture supports growth
☐ Training programs in place
☐ Retention strategies working

People score: _____/5

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STRATEGIC READINESS:

☐ Clear strategic rationale
☐ Competitive advantages identified
☐ Exit strategy if fails
☐ Timeline realistic
☐ Stakeholder alignment

Strategic score: _____/5

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TOTAL READINESS SCORE: _____/20

0-10: Not ready for expansion
11-15: Address gaps before proceeding
16-20: Ready for careful expansion

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Geographic Expansion

Market Selection:

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         GEOGRAPHIC MARKET EVALUATION
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Target Market: _______________________

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MARKET ATTRACTIVENESS:

| Factor | Score (1-5) | Weight | Weighted |
|--------|-------------|--------|----------|
| Market size | | 20% | |
| Growth rate | | 20% | |
| Competition intensity | | 15% | |
| Pricing/margins | | 15% | |
| Barriers to entry | | 10% | |
| Client relationships | | 10% | |
| Regulatory environment | | 10% | |
| TOTAL | | 100% | |

Market attractiveness score: _____

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COMPETITIVE POSITION:

| Factor | Score (1-5) | Weight | Weighted |
|--------|-------------|--------|----------|
| Reputation in market | | 20% | |
| Existing relationships | | 20% | |
| Service capabilities | | 15% | |
| Cost position | | 15% | |
| Local knowledge | | 15% | |
| People available | | 15% | |
| TOTAL | | 100% | |

Competitive position score: _____

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MATRIX POSITION:

                    MARKET ATTRACTIVENESS
                    Low         High
                  ┌───────────┬───────────┐
COMPETITIVE   High│ Selective │   INVEST  │
POSITION         │           │           │
                  ├───────────┼───────────┤
              Low │   EXIT    │  DEVELOP  │
                  │           │           │
                  └───────────┴───────────┘

Your position: _______________________

Recommendation: ☐ Invest  ☐ Develop  ☐ Selective  ☐ Exit/Avoid

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Geographic Entry Strategy:

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         GEOGRAPHIC ENTRY PLAN
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Target Market: _______________________

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ENTRY OPTIONS:

☐ Organic growth (pursue work from current location)
  Investment: Low
  Timeline: Long
  Risk: Low
  Control: High

☐ Satellite office
  Investment: Medium
  Timeline: Medium
  Risk: Medium
  Control: High

☐ Acquisition
  Investment: High
  Timeline: Short
  Risk: Medium
  Control: High

☐ Joint venture/partnership
  Investment: Low-Medium
  Timeline: Short
  Risk: Medium
  Control: Shared

☐ Key hire from market
  Investment: Medium
  Timeline: Medium
  Risk: Medium
  Control: High

Selected approach: _______________________

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INVESTMENT REQUIRED:

| Item | Year 1 | Year 2 | Year 3 |
|------|--------|--------|--------|
| Office/facility | | | |
| Personnel | | | |
| Marketing/BD | | | |
| Equipment | | | |
| Working capital | | | |
| TOTAL | | | |

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REVENUE PROJECTIONS:

| Year | Revenue | Gross Margin | Net Contribution |
|------|---------|--------------|------------------|
| 1 | | | |
| 2 | | | |
| 3 | | | |

Breakeven: Year _____
Payback: _____ years

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Service Expansion

New Service Evaluation:

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         NEW SERVICE EVALUATION
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Proposed Service: _______________________

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STRATEGIC FIT:

☐ Aligned with company strengths
☐ Serves existing clients
☐ Leverages existing capabilities
☐ Supports strategic goals
☐ Differentiates from competition

Strategic fit score: _____/5

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MARKET OPPORTUNITY:

Market size for service: $_________________
Expected growth rate: _____%
Competition level: ☐ High  ☐ Medium  ☐ Low
Pricing/margins: ☐ Above average  ☐ Average  ☐ Below average

Market opportunity score: _____/5

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CAPABILITY REQUIREMENTS:

| Capability | Have | Need | Gap | How to Fill |
|------------|------|------|-----|-------------|
| People/skills | | | | |
| Equipment | | | | |
| Licenses | | | | |
| Experience | | | | |
| Systems | | | | |

Total investment to fill gaps: $_________________

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RISK ASSESSMENT:

| Risk | Likelihood | Impact | Mitigation |
|------|------------|--------|------------|
| Capability gap | H/M/L | H/M/L | |
| Market acceptance | H/M/L | H/M/L | |
| Competition response | H/M/L | H/M/L | |
| Cannibalization | H/M/L | H/M/L | |
| Resource diversion | H/M/L | H/M/L | |

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GO/NO-GO DECISION:

☐ Pursue immediately
☐ Pursue with modifications
☐ Delay pending _______________________
☐ Do not pursue

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Client Segment Expansion

New Client Segment Analysis:

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         CLIENT SEGMENT ANALYSIS
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Target Segment: _______________________
(e.g., healthcare, education, government, industrial)

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SEGMENT CHARACTERISTICS:

Annual construction spending: $_________________
Growth rate: _____%
Typical project size: $_________________
Typical project duration: _________________
Payment characteristics: _________________
Bid vs. negotiated: ____% / _____%

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ENTRY REQUIREMENTS:

| Requirement | Met? | Action Needed |
|-------------|------|---------------|
| Prequalification | ☐ | |
| Certifications | ☐ | |
| Experience requirements | ☐ | |
| Insurance requirements | ☐ | |
| Bonding requirements | ☐ | |
| Security clearances | ☐ | |
| Relationships | ☐ | |

Time to meet requirements: _____ months

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COMPETITIVE LANDSCAPE:

| Competitor | Market Share | Strengths | Weaknesses |
|------------|--------------|-----------|------------|
|            |              |           |            |

Our competitive position: _______________________

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ENTRY STRATEGY:

Approach:
☐ Subcontract to gain experience
☐ Partner with established firm
☐ Target smaller projects first
☐ Hire experienced person
☐ Pursue certification/prequalification

Timeline to first project: _____ months
Target revenue in 3 years: $_________________

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Expansion Execution

Expansion Action Plan:

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         EXPANSION ACTION PLAN
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Expansion Type: _______________________
Target: _______________________

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PHASE 1: PREPARATION (Months 1-3)

☐ Market research complete
☐ Business case approved
☐ Budget allocated
☐ Key hires identified
☐ Facilities planned
☐ Systems requirements defined
☐ Marketing plan developed

Milestone: Ready to launch

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PHASE 2: LAUNCH (Months 4-6)

☐ Key people in place
☐ Facilities operational
☐ Systems implemented
☐ Marketing launched
☐ First pursuits underway
☐ Relationships building

Milestone: First proposal submitted

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PHASE 3: ESTABLISHMENT (Months 7-12)

☐ First project won
☐ Operations proven
☐ Client relationships growing
☐ Repeat business developing
☐ Refinements made

Milestone: Sustainable operation

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PHASE 4: GROWTH (Year 2+)

☐ Revenue targets met
☐ Profitability achieved
☐ Team built
☐ Market presence established

Milestone: Self-sustaining business unit

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KEY METRICS TO TRACK:

| Metric | Target | Month 3 | Month 6 | Month 12 |
|--------|--------|---------|---------|----------|
| Pipeline | | | | |
| Pursuits | | | | |
| Wins | | | | |
| Revenue | | | | |
| Gross margin | | | | |
| Headcount | | | | |

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Exit Criteria

Know When to Stop:

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         EXPANSION EXIT CRITERIA
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Define in advance when you would exit:

FINANCIAL TRIGGERS:

☐ Cumulative losses exceed $_______________
☐ Monthly burn rate exceeds $_______________
☐ Revenue below $_____________ after _____ months
☐ Gross margin below _____% for _____ consecutive months

OPERATIONAL TRIGGERS:

☐ Unable to hire key person after _____ months
☐ Quality/safety issues
☐ Key client loss
☐ Competitive response makes entry unviable

STRATEGIC TRIGGERS:

☐ Market fundamentally changes
☐ Better opportunity elsewhere
☐ Core business needs resources

EXIT PLAN:

If exit triggered:
1. Complete existing commitments
2. Redeploy/terminate staff
3. Close facilities
4. Communicate to stakeholders
5. Document lessons learned

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Related Documents

• Strategic Planning
• Capacity Planning
• Go/No-Go Decision Process
• Growth vs. Profitability

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Template provided by support.construction. Expand strategically, not impulsively.