As an ambitious entrepreneur, diving headfirst into a new market can be enticing, but be careful: Haphazardly jumping into a new project can quickly spell disaster.

Take Best Buy, for example. When it tried to enter foreign markets a couple years ago, it learned the hard way that what works in the United States doesn’t necessarily work overseas. The company failed to recognize that foreign countries already had their own discount chains and foreign shoppers had different buying habits. As a result, Best Buy had to pull out.

Fortunately for Best Buy, it can afford to keep its doors open after losing millions of dollars, but for most companies, venturing into a new market without proper preparation will be their demise. The key is a solid plan backed by market research.

For example, when my company wanted to create a new market for low-cost consulting, we knew it wouldn’t be easy. We studied the pain points of the existing industry, met with folks on the supply and demand sides to understand their dissatisfaction with existing alternatives, studied how other people had entered similar industries, and defined the minimum requirements for providing a solution that created value.

In other words, we became the experts, and on my journey, I learned a lot about market expansion. Here are five key insights:

1. Make sure you’re secure in your own market

If you’re still struggling to establish yourself in your current market, you can stop reading now because Steps 2 through 5 aren’t for you. However, if you feel confident about your current situation, then assess your internal capabilities. You never want to invest money in something on a whim, so examine your infrastructure and resources to determine whether your business can sustain itself while it invests in new growth.

2. Stay aligned with your current business

Aligning your new endeavor with your current business will simplify new branding and marketing efforts and decrease costs, especially if you can sell to current customers and continue to use your current supply chain.

For example, when Starbucks acquired Teavana two years ago, the company filled a hole in its offerings. Now Starbucks is taking the next step by expanding into alcoholic beverages. This careful evolution caters to its current customers by creating new reasons for them to gather at Starbucks.

3. Do your research

This step is absolutely crucial. If you know nothing about the market you’re trying to enter, your chances of success are slim to none.

Start by studying current players and interviewing industry leaders. Once you’ve gleaned all the information you can from them, you should clarify who your customers are, determine how you will reach them, and calculate the associated costs. Lastly, make sure you can differentiate yourself from the competition.

You can use quantitative surveys, door-to-door questionnaires, or cold calling to speak with potential customers. Remember that discontent with existing alternatives can come from anywhere (e.g., price, promotion type, distribution channel, customer service, revenue structure, etc.), and you need to pinpoint the problems you plan to solve.

4. Perform a cost analysis

Your research should include a detailed cost analysis to make sure you can afford the leap. Before moving forward, answer the following questions and identify the corresponding metrics:

• What are the growth rates of the market you’re entering?
• What is the forecasted demand?
• Who are your competitors, and how are they performing?
• Are there barriers to entry in this market? If so, what are they?

5. Take a calculated risk

If the information you’ve gathered looks promising and you’ve developed a clear plan to reach customers, offer valuable solutions, and stand out from the competition, it’s time to take the leap! Your research must be thorough, but at some point, you have to fight against analysis paralysis and make the decision to move forward.

Take Apple, for example. It was hurt by the rise of music streaming services and knew it needed to further invest in the music industry to sustain its success. After analyzing the space and sizing up the competition, it decided to acquire Beats. This was a bold, but smart, move that allowed Apple to expand its reach.

There’s always a level of risk involved in pursuing new endeavors, but without taking the plunge, there’s no way to truly know whether you’ll succeed. What’s more, good research can make your risks calculated and help you catch mistakes faster. Sooner or later, you have to be bold and jump in.