The world is becoming increasingly small. Technology, in particular, makes it possible for businesses of all sizes to branch out globally. So when your market begins to look small, why not expand it?
Although this sounds relatively easy in principle, international expansion can be a daunting task. You will need to devote a significant amount of time, talent, and financial resources to exploring the possibilities. If your investigations check out, you’ll need to repeat the investment to get operations up and running.
Going global takes careful planning and intestinal fortitude; it’s not for the timid. But those who dare to shuck the oyster just might find a pearl. Here are five ways your company can make the dream possible.
1. Do Your Due Diligence
Due diligence takes on a whole new meaning when you consider expanding your business to another country. Be sure you allot sufficient time and resources to conduct a thorough investigation of a potential expansion location. Not doing your homework could land your business in considerable trouble.
Make no assumptions about laws, taxes, and other compliance issues. Research the local infrastructure, transportation, and factors relevant to your supply chain. Information gathering might be best left to locals with the right credentials rather than trying to learn from afar.
Look at the availability of talent, local HR requirements, and going pay rates for specific jobs. And don’t forget to investigate unique global payroll challenges. Delegating that sticky compliance web to an experienced international payroll company is wise.
You might be able to just hang out a shingle in a new town in your own country. It’s going to take a lot more work somewhere else. Make sure you give diligence its due.
2. Know Thy Market
Have you heard the old cautionary tale about Chevrolet’s international expansion into Spanish-speaking countries? It is said that the Chevy Nova failed to sell in those markets because “no va” means “doesn’t go” in Spanish. What self-respecting Spanish speaker is going to buy a car with that name?
Although Snopes reports that this tale is a tall one, the lesson is still valuable. You should learn everything you can about an expansion market before you take the plunge. If you don’t, you might find your company jumping into the deep end without a life preserver.
Language and cultural differences will have a major impact on whether your business can succeed in an international market. Don’t give up right away if those differences mean your product or service won’t sell in its present form. A tweak here or there might be all it needs to find plenty of delighted buyers.
Surveys, focus groups, and competitor research and analysis are proven ways to test a market before you dive in. Results can inform decisions that will make your offering viable in an international market. If the water’s fine, go ahead and get in.
3. Develop a Strategy for Success
If you fail to plan, you’re planning to fail, as the saying goes. If you intend to use your home country business plan in an international market, you will be in trouble. You must invest in developing a business plan specific to an expansion market in a new location.
That’s not to say you have to begin from scratch. Undoubtedly, you’ve learned lessons about your brand and your business that apply everywhere. Nonetheless, as you’re creating a plan, question every strategy through the lens of the new market.
Learn from other companies already there, foreign and domestic. If they’re succeeding, learn why. If they’re failing or have failed, figure out why they did.
Make sure your business plan includes strategies tested by other companies and proven to succeed. Don’t worry about duplicating or modifying their strategies, even if they’re going to be your toughest competitors. You know what they say about imitation.
4. Get Boots on the (Foreign) Ground
It’s virtually impossible to develop a winning global market strategy from afar. At different points in the process, you and your people are going to have to actually show up.
Whose boots are on the ground could be open to interpretation. You might be tempted to send senior staff from company HQ. Although some of them will need to put in an appearance, you will need to get local talent involved.
Establishing a solid working relationship between staff in both countries is a smart move. Home office staff know your brand, but those in your expansion location know the intricacies of doing business there. You need to be prepared to have both in place from exploration of the expansion opportunity to the ribbon-cutting ceremony. It will be critical to find the right combination of your existing team members and local employees, whose insights will prove invaluable.
5. Prepare to Speak the Language
You can’t assume that all business you do beyond your borders will be conducted in English. If you want to be more than just another American company selling products globally, you’ll need to ingratiate yourself.
Not everyone in corporate leadership needs to be fluent in the native language of the expansion site. However, making the attempt to understand nuances of the culture and picking up some conversational phrases will be beneficial. Non-English speakers usually appreciate the effort, even if you butcher their language a bit.
In going global, you have a responsibility to be able to communicate with your employees at some level. If you don’t, they’ll never feel they’re truly part of the company. That will likely cause distrust of your brand from the inside out.
When you spread your wings beyond your home borders, you’re committing to those whose borders you’re entering. That means the entire corporate culture needs to change along with it. You can no longer see yourself as just the hometown hero but as an intrepid hero somewhere else as well.
International expansion may be daunting, but it’s far from impossible. The stakes are high for a company going global, but so are the rewards if it’s done right. After all, if the world proves to be your company’s oyster, there’s abundant potential for pearls.