Taking your business overseas provides unique opportunities to expand your target audience – and your profits. However, the prospect of higher revenues shouldn’t blind you from the myriad of challenges businesses face in expanding globally. A robust expansion strategy is essential for navigating foreign markets.
Before you start tapping into new overseas markets, consider these 11 things to include in your global expansion strategy:
What will it take to operate your business overseas? A physical location? Equipment? Materials? Shipping and logistics? If your business is going to exist beyond e-commerce, you’ll need to create a plan for procuring the resources you’ll need at your new location.
In addition, you’ll have to think about how you’ll take care of basic operational necessities like setting up wifi and a phone number and paying utilities bills. To avoid the time and cost of setting up your day-to-day operational tasks, you can start your expansion process by using a coworking space rather than renting your own office from the beginning. This will help you focus less on logistics and more on growing your business.
You may have your sights set on a particular area, but that doesn’t mean the people there are looking back at you. You have to make sure your ideal customers exist in your chosen market. Find out if there is enough need for your product or service, and how likely the people will be to purchase it.
Venturing into a new country requires learning about the cultures within and how they might perceive your brand. If you want your expansion to be successful, you’ll need to appeal to the people you will be serving.
Find out everything you can about local traditions, values, religions, holidays, and other cultural differences you’ll need to adapt to. Research income data to know how to price your product for better sales. Learning everything you can about your chosen market can give you a good indication on whether your business can succeed there.
In business, it’s not just about what you know, but also about who you know. Make contacts with relevant industry leaders in your countries of interest. They can help answer your questions, provide helpful resources, and introduce you to others who can influence your success.
Co-working spaces can connect you to future clients and key industry stakeholders, helping you enter the right network as you expand abroad. They can also facilitate the networking process by offering their members access to events and meetups with local partners.
If you will be selling in a different currency, you’ll need some knowledge about how to appropriately price your products and services. You should also look into banking options that can help you manage your new form of money. Converting other currency into USD isn’t free and can easily cut into your profit margins. Make sure you account for conversion costs when creating your pricing strategy.
Unless your business will be run by robots, consider how you plan to staff your new location. Take into account the education levels and capabilities of the local market, as well as the potential of relocating talent from your home country to work overseas. There is often a multitude of compliance requirements and considerations when hiring employees, including worker’s compensation, benefits, wages, cultural norms, and other details worth knowing.
No challenge to your global expansion strategy is quite as daunting as language barriers. If you don’t speak the native language, it’s in your best interest to hire translators. Seek out a company that provides comprehensive translation services, including website localization and in-person interactions, for best results.
Chevy’s Nova probably didn’t sell well in Mexico, since the name, in Spanish, directly translates into “No Go.” Gerber sold baby food in Ethiopia with images of babies on the jars, not realizing that, because of Ethiopia’s low literacy rate, food typically shows images of what’s inside the package.
Small nuances like these can have a significant impact on how well your product sells (or doesn’t). It’s invaluable to ensure you’re tailoring your marketing to the local audience – what works in one country isn’t always successful in another.
Other countries have their own tax system you’ll need to abide by, and it may look vastly different than the native one you’re used to. This is where it’s helpful to have translators that can help you navigate financial challenges and banking details to ensure you’re in compliance with the law.
Things like postage and packing requirements can vary from country to country. If you have a presence in multiple countries, you need to research the shipping requirements for each. Details like customs information and how the foreign address is written can affect the transit of your goods, and should be included in your shipping strategy.
Business Licenses and Other Requirements
What will it take to open your doors for business? Here in the US, a business license is a must, as it is in other countries. You may need to acquire additional licenses or pay fees in order to officially get started. You can check with the International Trade Association or your market’s local government for more information.
Deciding to expand your business globally isn’t a decision to take lightly. If you haven’t crafted a meticulous global expansion strategy, you’re sabotaging your chances for successful growth. However, if done correctly, you might find your new venture exceeds even your own expectations.