August 22, 2015
Building a solid domestic customer base is just the first goal for most entrepreneurs. Once achieved, you may feel it’s time to make the next big step and expand your business internationally. However, before aiming all your forces at conquering a new region, ask yourself the following six questions.
1. Is the foreign market I’m entering is compatible with my home market?
While no two markets in the world are identical, finding a familiar business environment is not really complicated. Focus on neighboring or same-language countries first.
As Michael Lee from Alibaba.com suggests: “Take into consideration trade barriers, proximity, currency and culture. Seek out homogeneity — the fewer differences between your country and the one you export to, the easier it will be to do business with.”
2. How do I best tell my brand story in this particular country?
When expanding globally, you can’t always expect your company’s brand to do all the heavy lifting for you. Some English brand names sound obscure or even hilarious to the local ear. Same goes with symbols – a crown does not carry the same meaning, for instance, in the US and China.
Before entering a new market, schedule a session with a few linguists to go through the language nuances and decide on the best way to convey your brand story and slogans in the local culture. In some cases, complete re-branding or changing the logo might be needed, so be ready to work out your new story from scratch. Add localization specialists’ salaries to your budget.
3. Do I have enough resources and staff to focus on both expansion and my home business?
Juggling overseas operations, while maintaining a top-notch domestic service with limited staff can be incredibly difficult and most probably, you won’t be able to sustain your growth.
Before expanding, carefully assess the financial and structural stability to hire new employees who can manage the new influx of growth. There’s nothing more pitiful than going global and losing clients at home.
4. Am I ready to travel frequently?
Though we live in the wonderful world where most operations can be done online, placing boots on the ground should be still be part of your new routine.
Make sure you have the flexibility to travel frequently and start collecting frequent flyers reward miles to defray the costs of your next business trips.
5. Do I have the right sales rep?
One of the most difficult, yet crucial points is to find the perfect oversees sales rep to help you sell and market your product. Rather than relocating your local sales force pros, consider finding someone locally who knows the market better than you. Remember: you can teach a person about a product or brand fast, while teaching about a market gets incredibly hard.
6. Do I know the local business laws?
As a foreign company, you will be subjected to unfamiliar regulations and may face significant legal exposure rather unexpectedly, as the cases of Airbnb and Uber recently showed. Make sure you carefully study all the potential hazards and possible loophole with your lawyers and assess the risks respectively.
Brad Peterson, a business lawyer and partner at Mayer Brown also advises: “Get solid contracts with the companies you’re working with, preferably contracts that you can enforce in the United States.”
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