Once you have established yourself as an industry leader in your own country, you may well be thinking about taking it up a notch and considering operating on a global scale. This is a big step for any company, particularly if you have started it up from scratch, and while it is one of the most exciting times for a business, it can also be extremely daunting. Fear not though; we have put together a few tips to help you make the transition from small scale to global leader.
Are you ready for global expansion?
Before you start the often long-winded process of going global, you need to make sure that both you and your business are ready, in both a logistical sense and a financial sense. There is no harm in holding on a little longer if you are not absolutely sure, as diving in too fast can have some adverse effects. Remember, just because you think that your product, service, or idea will thrive in another country does not mean it will. Scaling across borders will always be a complicated and expensive process, whatever the size of the business, and it takes time and resources away from other, more local opportunities and your core business operations.
Before you rush into global expansion, spend some time planning ahead and monitoring your market share, and try to figure out if it will support a move into new foreign markets and create more long-term business opportunities. If you do believe the demand is there for whatever it is that you are offering, that you have the funds to support the initial investment and sustain the expected growth, then absolutely go for it. However, bear in mind that success is rarely immediate, so that does need to be factored into your plans.
Consider the challenges of international business.
Global expansion brings with it a whole host of challenges and obstacles that you may not have considered. These include:
Language differences: Assuming the primary language of your business is English, how will you communicate in a Chinese market, for example? If messages are not conveyed correctly, this can be disastrous for your company. There are, of course, ways to get around this. One of the most obvious and most accessible ways is to hire bilingual staff that can translate for you. You can either take someone on in a full time, permanent role, or outsource this, depending on the needs of your business. If your line of work depends on customer interaction, make sure you employ people that fluently speak the language of the country you are expanding to. Wherever you are in the world, people expect top-notch quality customer service, and language can be an enormous barrier to that. A video translation service is another alternative, particularly if you want cohesive training across the board. You can make a training video in one language and use the service to show it to staff in all the countries that you operate in.
Cultural differences: Not only have you got to take language differences into account but cultural ones as well. Remember, every country and every culture has its own nuances and way of doing things, and it is vital to think about these and take care not to offend. You may need a local person’s perspective to understand how the culture and even taste could affect the market for some consumer goods and services outside the U.S.
International business compliance and regulations: You might be ultimately au fait with all of the business compliance rules and regulations in your own country, but you may well find that they are entirely different in the country or countries that you are looking to expand to. This includes tax laws, business regulations, and packaging standards, which differ globally. You may also find that some overseas banks are hesitant to deal with the administrative hurdles that working with an American based company can bring about, so you may have to set up a foreign banking entity to deal with the financial side of it, and that in itself can be a challenge.
The pace: Quite often, when businesses move into a market outside of the US, they realize just how fast-paced industry is in America. In most other countries, the pace is a lot slower, and this can take some getting used to. Don’t try to rush things, as what you are aiming to do initially is to build a relationship and trust with suppliers and customers, and if they feel rushed, this can be damaging. Slow down and go at the local pace.
Advice and best practice for global expansion
So, we have so far looked at whether you are completely ready to expand into the global market and some of the hurdles that you may face. If you are still prepared to go ahead, let’s look at some advice and best practice to give you a helping hand.
Find the right team: You can’t expand on a global scale without a reliable team behind you. It may be worth looking to see if you can find someone to take on a mentor role in the new country, to guide you through the rules as mentioned earlier and regulations. A local office and team that understands the language, the culture, and the market are essential to making sure everything runs smoothly and to communicate your company’s unique selling point in a way that is meaningful to the local market.
Make sure that you have the correct infrastructure in place to operate globally: Logistically, setting up overseas can be difficult, so it is essential that the foundations are in place and stable before you even consider launching. First of all, you need to decide which operations and decisions are managed and made centrally, and which can be done on a more local level, and make these clear to all involved. Secondly, crystal clear communication is vital, so consider how you will do this. Will you do it by live video call, conference calls, satellite calls, or email, and how will you manage the time difference? Thirdly, how will your employees share data securely, and does the data that you are capturing follow the law and best practices? Remember, if you are trading within the European Union, you have to abide by the General Data Protection Regulations (GDPR), so that needs taking into consideration.
Do some due diligence: Check everything, and then check again. And check a bit more. And then, get someone else to check. Before making any major business decision, you need to have run through every possible scenario and situation and how you would deal with them should they arise. Do not be tempted to expand into a country that you have never visited. It is not only disrespectful but could throw up things that you have not thought of. For example – does the weather impact on your business operations? Take some time to visit potential customers, distributors, OEM partners, and even competitors who are making either complementary or competing products.
The most important thing you need to do is to be flexible and willing to adapt. With every new country that you expand into will come new challenges, and you need to adjust your business model to accommodate these.