If your business has successfully grown, you may be considering taking it global. There are many benefits to international expansion, including increased revenue, raising brand awareness, and not relying on one market.
However, without conducting thorough research and preparation, an international business strategy can quickly fail. To ensure this is the right step for your company, here are seven factors to consider before making the leap.
1) Is there a demand for your product or service?
Having success in one country doesn't mean that'll automatically apply to another. For example, Tesco, the British supermarket giant, struggled to make waves in the US with its Fresh & Easy stores, after failing to understand and attract American consumers.
Investigate whether there is already something similar available that would be difficult to compete against. If there is a gap in the market, find out why there might not be interest in or awareness of your product.
If you're introducing something new, you will have to incorporate PR marketing into your business plan to educate consumers on your product. First, research your target market to discover if the product will translate to a different culture. Your product might be successful in your place of residence for a specific reason.
2) How much will it cost?
Calculate your international business plan's estimated operational costs, which may include office space rent, employee wages, and shipping costs. Then check your existing financial situation and expected growth, to determine whether you can afford this investment.
Ensure you factor in any different legal requirements, such as tax laws and employee contracts, which can result in hidden costs if overlooked. Consult with finance experts who are familiar with the chosen country’s regulations for guidance.
3) How will you manage the logistics?
Whether you open physical workspaces in different countries or operate the entire company digitally, determine how you'll manage each expansion aspect.
The global trade management software, ManSys, will help keep your business organised. It allows you to control every aspect of the international business strategy from one platform, including planning transportation, export documentation production, and customer service. You can also use this program to measure and improve profitability by transaction, client, market, or product.
You'll also need to create a network of local experts who can assist with different business areas on the ground, such as marketing, sales, and manufacturers. Until you're able to travel to the location, develop these relationships by conversing online through video calls, emails, and professional communication platforms.
4) How will you promote your business internationally?
Before you begin trading in a different country, you need to gain brand awareness and create excitement for the products, so that you can hit the ground running. Starting a marketing campaign after launching your international business will result in time and money wasted.
For advice on which strategies would be most effective in countries you're unfamiliar with, liaise with marketing professionals based in the area.
5) Do you have an online presence?
Investing in the digital world before going global will strengthen your chance of success. It's much easier for businesses to break into international markets online, as having a good and visible website can attract people from all over the world. To reap the benefits, though, your site should be aesthetically pleasing, user-friendly, and professional.
You can also use social media platforms, such as Instagram, Facebook, and Tik Tok, to gain new customers and promote your business overseas. Social media is also a great way to showcase the brand's image and personality, enhancing customer loyalty.
Although a rapid increase in website traffic or social media engagement is a good sign that your business is gaining interest, it's not the underlying factor. Analyse digital marketing data to establish whether these interactions are converting to sales. If they aren't, investigate what's stopping people from making a purchase. You may need to try a new digital strategy or combine it with other techniques.
6) Can you maintain the same quality?
The expense of going global shouldn't hinder the standard of goods. Don't fall in the trap of lowering the production quality to cut costs as this can damage the company's reputation, result in order returns, and diminish consumer interest.
To repeat the success you've gained nationally, ensure you can conduct the usual quality control procedures, afford the same materials, and use modern equipment. On top of this, provide enough time for staff to complete the tasks to prevent them from making mistakes, wasting material and money.
7) Are you equipped to handle further business growth?
While a growing business is a sign of success, continuing this growth shouldn't always be the priority. If you're struggling to keep up with your business's current demands, you may struggle to stay above water with an international expansion. Instead, focus on your existing workload until it becomes manageable.
For a global business strategy to thrive, you'll need a bigger team and workspace to promptly fulfil the heightened volume of orders.
Is your business ready for international expansion?
Considering these factors should help you conclude whether going global is the best opportunity for your business to succeed. If your company has weaknesses across some of the above areas, that doesn't mean international trading isn't achievable, just spend time improving your company.
When you're able to begin growing your business in another country, make a clear plan of action with achievable goals across a specified timeline.
Globally expanding your business can come with many challenges and complications, which can be daunting. However, focussing on one country at a time will allow you to spend time tailoring your strategy to specific markets.