‘Do I need to go global with my business?’. Perhaps you have asked yourself this question once. Winning new foreign markets is a big chance for your company. However, it can also be a threat that can have a negative impact on your business. You must be well prepared before taking this kind of step. When deciding to go global, you should take into account several factors.
Expanding your business to new markets is a big risk. But if you don’t take a chance, you won’t win. No risk, no fun. New markets are also an opportunity to keep your business on the right path for development. Stagnation is the worst thing that can happen to your business.
Ok, let’s start with the basic positives that are associated with going global. Thanks to the expansion into new markets, you can:
– stimulate the growth of your company,
– increase the product lifetime,
– reduce dependence on the domestic market,
– increase revenues,
– win global clients,
– establish new contacts,
– get to know new technologies and develop your know-how.
Sounds inviting, right? All of the factors mentioned above are your chance of success, however the road to success is paved with risks. International success might seem an easy challenge when your business is already going well locally, but in reality, it is not easy to achieve. Your business model and products must be ready for it. Therefore, before making the decision to enter a new market, consider whether:
– you have sufficient knowledge about the country in which you want to expand your business (knowledge of its particularities, legal norms, rules, and even culture),
– your product is ready for business scaling,
– you are financially prepared for new investments (and even ready to be without a real ROI for a while),
– you have adequate human resources (experienced people, qualified managers, appropriate competencies),
– the potential growth/profit is proportional to the risk you will incur,
– your real target group exists on the new market,
– the new market is developing or it is stagnant,
– are you able to effectively compete with the current competition there,
Anyhow, I assume that if you are reading this article, you are interested in entering a new market and looking for the right ideas and strategies that will help you succeed. I have prepared for you a short ‘action plan’ that you should consider at the stage of planning the expansion.
1. Begin by estimating your chances, threats, potential risks, and opportunities. Analyze the specificity of the market and the activity of the competition. Think about the conditions you must meet in order to start generating profit as soon as possible. Also, verify that this market is a good place for your product and if there will be a demand from customers.
2. Prepare an international business plan. Set your goals, KPIs, budget, and plans. Consider the responsibility of those who will be responsible for this project. Prepare a plan that will allow you to compete effectively with your competitors.
3. Build a team. It is good practice to appoint a competent person who will be responsible only for the expansion into a new market. It is important that this person is an experienced manager with similar projects in his/her portfolio. And remember – do not underestimate people resources. As the famous quote states – “Your company is only as good as your best employees”.
4. Find the right partners. Depending on the industry, it is good to make contacts with local businesses. If the expansion of your product depends on the cooperation with other entities, think about this solution. On one hand, you have a chance to work more effectively with companies that already know the local market, and on the other hand, you can reduce the costs. Use your contacts.
5. Remember about customer service. You’re new on the market, right? If you want to attract customers’ attention and make them stay with you, you have to stand out and prove your worth. Therefore, remember about efficient and qualitative customer service. Plan the customer service process with the utmost care. Keep in mind that recent statistics say that up to 75% of users return to a company, brand or product, only if their previous interaction brought them positive experiences.
Expansion in a new market is a very difficult decision for every entrepreneur and manager. This is a risk that can pay off in the long run. If you decide to take this step, make sure that your product is really ready for it. Entering a new market is often associated with large financial outlays, which will not immediately start to pay back. Therefore, consider all the pros and cons and … good luck!