So, you are thinking of taking your business international?
As an entrepreneur, one of the primary goals that you may have is to grow your business internationally and sell your products and services globally. It’s possible to actualize this dream!
However, pursuing global expansion isn’t always an easy task to pull off. Several roadblocks may stand in your way and if you aren’t strategic, your plans could end in failure.
For example, premature or rapid expansion is one of the top reasons many small businesses fail. We’re here to ensure your efforts are successful.
Break into New Territories With a BANG!
Here are top strategies and tips on how companies successfully go global.
1. Establish Whether You’re Ready to Expand Globally
It’s one thing to want to expand your business globally and it’s quite another to actually do it. There are several moving parts involved, and they should all move seamlessly.
So, is your business ready for this big move?
A common mistake entrepreneurs who want to go global make is being overly ambitious. They pay too much focus on the potential benefits and give little attention to whether the business has adequate capacity to expand. Don’t be like these entrepreneurs.
The big question is: how do you know your business is ready for global expansion?
A clear sign is if your products or services are attracting a lot of international attention. Perhaps you sell your product online and only ship it to people in the United States, but this hasn’t stopped thousands of people in other countries from inquiring about shipping availability.
That’s the demand side of the equation. What about the supply side?
If you were to open up your shipping borders and allow international orders, will your business’ production facility be able to match up the increased demand for your goods?
It’s not uncommon to see companies selling out their product as soon as they launch internationally. While this is a good sign your product is hotcake, customers aren’t going to lurk around for too long waiting for you to ramp up production and start shipping again.
Be sure to do extensive due diligence on your business and establish whether it’s truly ready for the global market. If you’ve never done this before, hire an expert; otherwise, you could make assumptions that can come to bite you later on.
2. Develop a Global Expansion Strategy
You won’t just wake up one morning and say, “Alright, let’s start selling products in Mexico and Canada.” You need to carefully strategize how to penetrate those markets.
There are a couple of international expansion entry modes to choose from. Exporting is the most common and offers fast, low-risk entry. If your business sells physical products, especially online, allowing international orders essentially means you’re an exporter.
As long as you’ve got a reliable international shipping partner, your product will reach customers. Later on, you can set up a regional distribution facility in a certain country to allow for faster shipping and also reduce operating costs.
Another method is licensing or franchising. This is popular in the foodservice industry, but can be used by just about any business.
When you run the franchising model, you allow entrepreneurs in other countries to set up your exact business. They will sell your product or service and replicate your branding in their stores. In return, you’ll earn money from licensing fees and annual royalties.
Don’t want to export or franchise?
You can snap up (acquisition) a suitable company in the country you’re looking to enter. For instance, if you’re a beverage manufacturing company that wants to expand to Asia, you can acquire a small beverage company in the region and utilize its existing infrastructure to produce and sell your products.
Other methods include mergers, strategic alliances, and greenfield ventures (launching a new company from scratch in a new country).
3. Be Strategic with Your Choice of Expansion Countries
You certainly aren’t going to expand into all countries at once. If you’re anything like most business owners on expansion mode, you’re going to enter two or three countries, then keep expanding gradually.
Gradual expansion is necessary for two reasons: One, it enables you to establish whether you’re using the right expansion strategy. Two, you’ve greater control of your resources.
That being said, a key to successful global expansion is choosing the countries you want to expand into carefully. An ideal country should have a high number of customers who want to buy your product and an enabling environment for foreign businesses.
It’s also important to consider cultural differences and evaluate how they will affect your plans. For example, expanding into a non-English speaking country, say France, presents a couple of problems. Once you start selling in France, you need to set up a customer service team that’s fluent in French and conversant with the French culture.
You might also need to invest in a translation and localization service like this technology, which makes it easier to keep a consistent tone of voice across markets.
4. Assemble an Expansion Team
A global expansion isn’t a digital task that you can assign a computer application. Tech is essential, no doubt, but the powerful force behind business expansion is your people.
You need to build a team of professionals who’ve mastered the science of taking a business global. Ensure each team member has a clear grasp of their duties and responsibilities.
Without a solid team dedicated to this process, your expansion efforts could be an exercise in futility.
Doing business in multiple countries not only increases your revenues, but also positions your company as a global brand. However, a lot of work goes into taking a business global.
Use this guide, which fleshes out the bases you need to cover, in your global expansion quest.
All the best and keep tabs on our blog for more business tips.