It’s a familiar situation for many businesses — after growing your business to its largest extent in your home country, you start looking at other countries that may be receptive to your product or service.
Expanding your business overseas can be a daunting experience, but it’s also one that can be highly rewarding. Breaking into a new country can both fuel your business’s growth and provide you with the confidence and experience you need to keep growing further.
Unfortunately, many would-be international businesses go about the process in the wrong way, making costly mistakes that can limit long-term growth and compromise opportunities.
Below, Business Adviser and Corporate Consultant, Neil Debenham has shared five techniques to keep in mind if you’d like to expand your business overseas, covering everything from understanding local business laws and regulations to working with a proven, reliable team in your new country.
Before you launch, understand the legal environment
Many businesses have expanded aggressively overseas, only to be held back by regulations, rules and laws that are different from back home.
From laws regarding foreign ownership of businesses to specific local regulations, a variety of different legal issues can affect your business’s growth if you rush to launch in another market without first doing your research.
Before you launch, it pays to talk to a local law firm in your country of choice to understand the business environment you’re moving into.
Simple things like local capital regulations, restrictions on certain types of businesses or a need to partner with a local company may all affect your outlook and require changes to your strategy for growing your business overseas.
Prepare a detailed, long-term financial plan
When you’re starting and growing a business in your home country, you have something similar to a home-field advantage — a native understanding of how much things will likely cost and what you’ll typically need to spend.
Overseas, this isn’t always the case. Things that might seem inexpensive can quickly double or triple in cost as you run into regulations, bureaucratic barriers and other unplanned expenses to get your new business off the ground.
Because of this, it’s important that you prepare a detailed financial plan before you start. Try to work as closely as possible with your local legal partners — they’ll be able to provide a valuable degree of insight into the expenses you’re likely to encounter in your new market.
Study the local language, culture and other factors
Many successful businesses fail overseas due to a lack of understanding of the local language, culture and customs.
For example, Mattel’s immensely popular Barbie series of children’s dolls failed to sell in China, even after a $30 million USD investment in a huge Shanghai retail store. The reason? Chinese consumers, by and large, weren’t as familiar with the brand as those in other countries.
Likewise, fast food giants McDonald’s and Burger King launched relatively recently in Vietnam to significant fanfare, only to grow sluggishly due to significant local competition and a market that prefers group dining to personalized, individual meals.
To avoid failing overseas, it’s critical that you understand the needs and priorities of customers in your target country. Don’t take for granted that the market will respond the same way it does at home — things like language and culture often create a very different environment.
Build a reliable, results-focused loan team
Without a great team, growing even the simplest, most popular business can become a serious challenge.
Just like it’s important to hire strategically at home, it’s essential that you staff your business with high quality, reliable people in your next country. Hire selectively and create a team of motivated and reliable people to manage your business overseas.
If you don’t feel confident hiring in a different country, consider partnering with a local company to develop your brand overseas. Many businesses specialise in working with foreign partners to break into new markets and fuel growth overseas.
Team up with local influencers and agencies
Finally, if you sell directly to consumers, teaming up with local influencers and agencies can be a great way to establish a base of customers in your new country, concluded Neil Debenham.
From YouTube users to local celebrities and influential people, making contact with people that can help your business grow can help you launch the overseas branch of your business with a real sense of momentum.
Expanding overseas can be a fantastic opportunity to grow your business from a local success into a global one, provided you approach it correctly.
From planning ahead to understanding the local culture, the key to success overseas is largely preparation. Understand your market, build a talented team and you’ll be in a stronger position to expand your business overseas successfully.
Neil Debenham www.neildebenham.com