Most entrepreneurs have a vision to grow their companies to the global stage. It marks a critical milestone in business growth and personal success.
While bringing your company to the global stage is indeed exciting, there are many variables that need to be considered prior to making such decision.
Six key criteria to be considered are:
Reason for expansion
Why exactly do you need to expand to a foreign country? Is it because of a saturated local market? Or extension of services to provide better support to your existing customers globally? Or other different reasons? Whatever the reasons are, defining the exact reasons why you need to expand will help you in creating a solid strategy to enter the new market.
Current state of your local business
How well are you doing in the local market? Solid or weak? Can your business function effectively in your absence? Do you have enough resources to support your local business? Can you afford to reassign resources to establish the new venture overseas, at least in the initial set up of your new operations?
Where’s the money?
You need to have a realistic budget to ensure you can start the ground running. This is a very complicated task as you will be working with loads of unknown variables – for instance, cost of physical set up, resources, time, finding the right talents, understanding the potential red tapes, sizing up competition and tailoring marketing plans. In addition to the listed examples, you need to incorporate several risk mitigation factors. At the end of the day, you are looking at potentially an additional buffer of 50% to 80% of your expansion budget.
Know your target market
The last thing you need is surprises. You wouldn’t want to be caught by unforeseen competition or regulatory measures that you are not aware of. Hence, research the market in detail. Understand everything that you need to understand. Just go through your market due diligence check list one by one. Validate your findings with others whom you know are already operating in the country that you wish to venture into.
Go global, operate local
Despite your global status, you must be unique in each country that you serve. Make a real effort to understand the local culture and its implications on your business. Flexible adaptation to the local needs is crucial. You may need to customize your products and services. Your marketing messages need to be in the local language that translates correctly. In addition, you would also need to understand how local culture will impact your sales process. Some cultures are not straightforward in communicating their non-interest in your products and services. They have problems in saying ‘no, I am not interested’. In situation like this, you may end up wasting time chasing unqualified opportunities.
Take it at your pace
Avoid rushing into business expansion just because you think it is a nice thing to do. Take it a step at a time. The rule is to do things right with enough research done on every decision criteria that you have.
Have you expanded your business globally? What are some of the key lessons learned to grow your business to the global stage?