Who are your customers?
Which country do you want to expand to?
For any entrepreneur, the idea of expanding their business to reach the international market has undoubtedly crossed their mind. After all, local competition can be demoralizing and a foot in a foreign country with a unique brand is surely bound to bring some extra revenue and global awareness for your company. While it may be true that the competition abroad may be dryer, and that expansion there affords your business the opportunity to develop in major markets, there are numerous factors that need to be considerably thought-out before embarking on such a journey.
Here are some questions you need to ask yourself to ensure that this prospect is a viable one.
Who are my customers? You need to conduct research to ensure that there is a customer base that needs whatever it is that you are offering. Not only do you need to have the customers, but you need to know what the consumer habits and preferences are of that country. Mike Zani, CEO of PI Worldwide, advises entrepreneurs to travel and experience the country that they are wanting to invest in. This will enable you to get the feel of the culture and familiarize yourself with the cultural differences of that region.
How compatible is the new market? It should be easy for you to become accustomed to the market as the more similar the market, the easier it will be to engage in business with that country. Also make sure that you research whether the market is mature or an emerging one. Markets will be willing to accept certain brands at different stages in their maturity level.
Do I have the necessary resources? When expanding your business, you should not ignore your domestic growth. To aid this, you will need the financial resources as well as the most effective staff to maintain your local business while being able to expand elsewhere. A team completely concerned with international development is crucial to ensure success.
The following challenges are likely to arise when expanding your business to the international market and need to be researched and evaluated carefully.
Cultural and linguistic differences:
You need to respect that another country might have different cultural norms and practices as well as different languages in which they communicate with and conduct business in. This could be complicated in the beginning and it is therefore important to, once again, research these norms to determine how they might affect your product/service. Sometimes, different cultures pertain to different needs and this will impact your sales and marketing strategies. Ensure that your brand translates well into any other local languages, and re-evaluate any branding color-schemes and designs to suit the new region. The speed of business may also differ from country to country. It may take time for you to adjust to the different paces at which business transactions are dealt with abroad. Depending on the cultures, some countries could take significantly longer to process a dealing. The Far East for instance, prefers that business deals are accompanied with personal interactions too.
Legal and compliance issues:
International dealings are quite likely to be more convoluted than local proceedings. Again, depending on the country that you want to expand to, you will have to do the necessary investigation into these rules and regulations. You may have to set up foreign bank accounts and business entities to avoid administration encumbrances. Your packaging and labeling might need altering as well to fit into specific standards. You will need to contact your attorney to protect your intellectual property abroad and file for the necessary trademark and patent documentation. Franchise disclosure rules will also vary depending on the country. Seek out trade representatives from governmental trade offices. Make sure that you implement strict controls over whoever you license your product with overseas. You want to keep your quality consistent for your customers and you do not want providers to abuse your name.
While there may be a lot of domestic competition for your brand, this does not detract from the possibility of there being a significant amount of competition in your prospective country. You have to assess whether your product or service will be able to penetrate the new country’s market. If you have a small or medium-sized company, you will have to put in more effort to convince your new customer base that your brand is better than what they have. Understand the existing competitors in the country and distinguish what your competitive advantage is then use that to set yourself apart from the rest.
Lastly, here is some advice on how to enter the international market:
Find the right partner and staff:
Your expectations for your partner should be clearly outlined and met. You need to go into this venture with somebody trustworthy and well-accustomed to the foreign market. He or she also needs to be someone who is passionate about your product or service and can offer you advice based on experience in your particular sector. Your staff need to be immersed in the foreign market and have a keen interest in your development. A good idea is to hire bilingual staff to make communication easier and more effective.
While maintaining your brand’s integrity, look out for any adjustments that may need to occur to suit the new environment in which you want to penetrate. This may call for re-branding and different sales and marketing approaches. Also be aware that foreign customers may respond differently to new ideas that you might impose. Stay adaptable to avoid offending cultures and focus on being accepted into the market. Rather than limit yourself, keep your brand open to branching out into new products or services that may be more in demand and applicable to the area in which you are seeking to conduct business in. Do not be afraid to explore alternatives and take precautions.
The international market may be intimidating, especially if your business isn’t a large multinational corporation, but if you follow the steps above and continuously re-evaluate your place in the market, weigh-up your strengths and weaknesses, research consistently and adapt your business strategies accordingly, you could expand your business exponentially.