Establishing your business overseas can be both risky and rewarding. To determine whether your business is ready for international expansion, work through this series of simple questions.
What will international expansion achieve for your business? Will it bring hard benefits like increased profit or turnover, more customers or greater scale and diversification? Or is your desire to expand driven by softer benefits such as more excitement, travel and challenges?
Believe me, it is easy for entrepreneurs to get caught up in the excitement of travelling overseas. Sometimes my job is to stop them from jumping on a plane and heading off into the wide blue yonder without doing the appropriate research at home first.
Identifying which market to expand into is often the hardest decision you’ll need to make.
With so many countries desperate to get hold of your unique product, service or capability, where on earth do you go first? Do you start with established markets like the US, UK, Europe or Japan? Or prioritise emerging markets with large populations, such as China and India, the largest of the world’s big rapidly industrialising countries (BRICs)?
Choosing one country over another requires a dispassionate, objective and sound approach. Be sure to allow sufficient time do your research properly and to devote adequate attention to any legal or regulatory issues that may affect your ability to do business in the market.
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What are you selling?
You must understand all of the following before going any further:
- What product, capability or service are you going to export?
- How will it need to be adapted for your new market?
- How can you build a value proposition in a new market?
- How scalable is it?
- Will you be a niche player or do you need volume in order to be profitable?
How will it work?
What do you know about the markets you’ll be working in? What are the factors that will lead to success or failure? How committed are you to success in your new market? Are there any cross-cultural considerations that could impact on your business?
What else will you need to learn to be successful?
Who do you need to involve?
What extra support, resources and financial backing will you need to ensure your offshore expansion is successful? Who can you go to for capital if you need it? Will you need a local distributor or agent, and how will you select them?
Whose role will it be to develop your offshore business? If it’s yourself or one of your top people, how will that affect your domestic business?
When will you be ready?
How and when will you launch offshore? Will you do one major launch or a series of soft launches?
How will you ensure you’re fully prepared for international expansion?
What happens if you achieve more than you expect? Can your business cope with that level of demand?
As you can see, there are many issues, challenges and points to be addressed, and all of them take time to research, review and assess properly. Like all things in business, having a plan before you get started is a good idea!
How are your plans for world domination coming along? If you’ve already taken the big leap into international expansion, please share your learnings with the rest of us!