Expanding a start-up business internationally is a complex and dynamic process. Gaining a deep understanding of the targeted markets, the competition, current local market trends, and the requirements to successfully launch and drive growth lays an important foundation.
You are going to need more than a successful product and a great logo to make an impact. Failing to anticipate cultural differences can mean disaster when doing business overseas. The world is an incredible and diverse place, and an abundance of wonderful opportunities exist. If done correctly, expanding your business internationally could be the key to continued growth and success.
Do your due diligence: Before expanding, it is critical to understand what the full impact on your business will be.
- Prepare a market segmentation analysis to determine if your product will sell in the local market.
- Prepare a product gap analysis against local products. Is there a demand that is not satisfied by a local company?
- Perform a SWOT analysis against competition. Your product will likely be higher priced than local products. Will the market buy your product?
- Consider market opportunity/sizing. How big is the market and how long will it take you to capture your targeted sales?
Do not think that one size fits all: Expanding internationally is often a lot more involved than many anticipate. Local standards that we take for granted may not be accepted abroad. Do your research and be aware of these issues before you invest time and money into expansion. Put special attention into cultures, customs, and laws. Take the time to foster relationships with local economic development agencies (both public and private sector), the Chambers of Commerce, and other similar local companies. Ensure you have someone on your team who understands the local landscape to lead your expansion project as many cultural factors may affect how customers will respond to your product and/or your branding.
Ensure Product Readiness: Based on the product gap analysis, take the necessary steps to present your offerings to achieve high-impact product differentiation in the market.
- Review government- and industry-specific regulations to ensure that compliance and certifications are obtained if needed.
- Pay close attention to the translation of the name of your product in the local language, if applicable.
- Initiate testing and quality assurance review based on local standards.
- Consider a local logistics and distribution network. Who will sell your product and how will it get to them?
Protect your intellectual property: Your intellectual property is incredibly important, protect it! It is a whole new ball game when you take your brand overseas. Initiate a patent and trademark review—some countries are known for “copying” good ideas. Seek expert legal advice and ensure you have someone who has experience with branding in the market you are expanding into.
Research local HR rules and regulations: When you expand internationally you may work in different time zones. While it is important to be available to your staff and your customers when they need you, you need to be sensitive to the cultural view of work-life balance. Consider the culture of the new market you have entered and to ensure that your internal communications reflect that culture. You must ensure that you are sensitive to the standard work environment of another country.
Ensure Legal, Tax and Financial readiness: It is critical that strong legal processes are put in place to minimise commercial risks. Also, government agencies have strict requirements that necessitates legal documentation be in place prior to operating within the country. Being proactive does require money upfront, but this offsets downstream risks and liabilities.
- Create localized commercial agreements.
- Review industry-specific regulations to ensure compliance and certifications are obtained if needed.
- Ensure general corporate services such as immigration, customs, and shipping are met.
- Set up proper tax and finance infrastructures early to ensure that you are adhering to local corporate policies and procedures.
- Establish local banking relationships.
- Develop a cash repatriation plan.
Expanding your business overseas is not for the fainthearted, but for some businesses it will be inevitable as international markets offer greater opportunities for growth. By paying attention to details the difficult job of “going global” can produce great results.
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