Going global – is defined as a worldwide movement towards economic, financial, trade, and communications integration.
While your local market might be huge enough for almost everything, growth-minded business owners see the rest of the world as their playing field. Seeking international growth by going global offers opportunity, aplenty if done right!
Did you know that 95% of consumers live outside of the US? So, if you haven’t considered it before, now would be the perfect time to take advantage of the international market.
Going globals isn’t something that you set up overnight, but that’s the case for all worthwhile business endeavors no matter if domestic or international.
Why Global Business is Important
- You will reduce your dependence on markets that you have already established.
- It is possible to counter the effects of seasonal destabilizing fluctuations and cycles by exploring markets with countercyclical market conditions
- Your products or services sales life can be extended by tapping into new markets
- You will gather tons of experience and learn how to compete against foreign companies on their ground.
The prevailing reason for going global is to improve your potential for expansion and growth. And there are a lot of opportunities for businesses just waiting to be seized all over the world.
You could spin the globe, randomly point your finger, and you can find a chance to sell something, somewhere!
Obviously, coming up with the right ideas and eventually executing this idea will take effort and work, lots of it!
The following will get you started on that work.
What do I need to watch out for before going global?
Does my product have a chance to sell well in the targeted region?
Think market research here. The first and foremost thing you need to do before going international is to understand the demand for your product or services. You mustn’t rely on the fact that if your products are selling like hot potatoes in your current market, your products will be welcomed wholeheartedly around the world.
Vice versa, you can conclude that if your business endeavors fail in one region, that doesn’t mean that your products or services are bad, it might just be that they were not needed.
To be able to grow your business in new regions, your products or services will need to satisfy its demands!
Is your target market already familiar with your service or product?
With this one, there is no good or bad answer, but it depends on your business’s circumstances.
If your target region is completely unfamiliar with your services, you should expect to invest a lot of time and resources in consumer education.
On the other hand, if you are the first to penetrate the market with a new and perhaps exciting product, you are on the way to establish a name for yourself. The product can become synonymous with your brand.
Do you feel comfortable in that country?
If you are not running a completely internet-based business, then you will probably have to live there, at least until everything is set up and good to go.
To successfully navigate through the vast amounts of paperwork you will most likely face or to live your day to day life, and you will need at the very least, working knowledge of the local language.
If that is not the case, you are best off finding excellent and reliable translation and interpretation services to assists you through the often tough early stages of setting up a business.
And here is the beauty of our big, big world. If you did ‘t get the answers you were looking for, that doesn’t imply that your ideas were poor – you might have just picked the wrong place.
With 7+ billion people spread around the globe, it is hard to imagine any one idea that won’t work somewhere on this planet.
How do I prepare to take my business global? – The 10 key steps
Taking a small to medium-sized business global is a complex process.
Hence, it is imperative to gain a thorough understanding of the targeted markets, your direct competitors, current market trends, and the specific local requirements you need to start successfully launching your international growth.
Read on to learn about the foundation of any global expansion:
Understand the need for your product or services – Perform your Due Diligence
Before you go global, it is crucial to understand what impact it will have on your business.
- Prepare a Market Segmentation Analysis: Determine if your services will sell and who you will need to target
- Examine your competitor’s already established products. Prepare a Gap Analysis and figure out if there is a local demand that is not yet satisfied by anyone else.
- Research your target market. How bis is the market for your product? How long will it take to get to your targeted sales goals?
- Evaluate your company’s competitive positioning? Your product will likely be priced at a premium to local products. Can you still sell it? How can you sell?
Develop a business plan and try to stick to it
Every business needs a plan – even more so if you are entering new market conditions in regions, your business has not yet explored.
It is a fact that every country has its own set of rules and regulations for every sector, such as economic, legal, and political.
Develop an individual plan for every different market you are planning to approach and adjust it according to the specific requirements in the region.
Things to include in a successful strategy and business plan:
- Clearly defined goals and objectives
- What are your success metrics?
- What are your financial projections?
- Define your business model and structure ( Will you set up your business as a separate company, branch or a pure sales office)
- Develop a comprehensive annual budget
- Layout your project plans and commit dates
Besides having a well throughout business plan, you must be sticking to it. Tweak and expand your objectives and processes whenever necessary. There will always be a need to keep your business relevant within a sector.
Establish a dedicated (interim) team
Many companies make the mistake of trying to build a local team from the ground up. This can be very time consuming and sometimes risky, but most importantly, it delays the time at which you could be marketing your products or services.
In most cases, you are better off using proven senior interim executives. This way, you can get the ball rolling straight from the bat while your company hired the right senior management team.
Get your product ready
Based on your previous analysis, take all steps necessary to prepare your product or service for its initial launch while achieving high-impact product differentiation.
- Keep your website updated with fresh content and exciting advertisements or promotions
- Determine if localization of your website or product is necessary and translate relevant information and marketing material. Professional global business services will come in handy at this point, freeing up your time for additional research and marketing.
- If you deem necessary, initiate a patent and trademark review as some countries are known to be copying every good and working business idea.
- Establish local logistics and distribution networks
Technological advancement has made it a lot easier to expand business worldwide.
A successful entrepreneur needs to think beyond a traditional brick and mortar business model but must invest in website development and search engine optimization (Seo).
Your SEO plan must be well thought out for it to rank as high as possible on search engines and generate new business leads.
Successful expansion is dependent on a great local-marketing strategy, and SEO is a vital part of this equation.
When your new market speaks a different language or has an entirely different culture, you will need to build a new site specifically for this market.
With 93% of all website traffic coming directly from search engines such as Google, it is crucial to do in-depth research on phrases and keywords patterns in your territory.
Great free tools for this research are Google Keyword Planner and Ubersuggest. These or similar tools will provide you with extensive and invaluable insights on how the people in your new market behave and think about your products and services.
To effectively sell your products or services, you will need a cohesive strategy in place that addresses your sales strategy, delivery processes, branding and marketing approaches, and your pricing structure.
All these should aim to differentiate your products or services and lead to market acceptance and, ultimately, growing your business’s revenue.
- Will a new brand be created, or will you use your existing brand?
- How can you price your product? Does your product pricing integrate well into the local market environment?
- What is your optimum sales model? Direct, indirect, or hybrid?
Prepare your Organization
Different cultures, different norms!
Whether it is language, customs, or regulations, a firm expanding to new territories will need to be flexible with its internal policies and procedures.
This way, you can ensure that employees identify with your companies message and have the understanding to execute the companies plans properly.
- Are your compensation packages competitive and can attract qualified employees?
- What is the optimal organizational structure to execute your business?
- Is your technology infrastructure compatible with your domestic infrastructure?
- Do your policies and procedures comply with the local requirements?
Set up Stong Legal Processes
You must understand the legal environment before you enter a market.
Countries have different legal requirements, which are not always very clear.
You must set up strong legal processes in order to minimize any financial and legal risks. This is especially true when it comes to certifying products as safe following local standards.
The government will have very stringent rules that will make it necessary to have legal documents in place before operating in the country.
- Study industry-specific regulations to ensure your business complies to all of them
- Maintain corporate records
- Create localized contracts and commercial agreements
Prepare tax and finance related matters
Before starting your business, you will need to have the proper tax and finance structure set up. This way, you are ensuring that your business is receiving timely reporting and that you can adhere to local policies.
- Outsourcing accounting to a local company can drastically reduce the time needed for restructuring and adjustments
- Prepare and report for VAT taxes
- Establish local banking relationships
Build relationships with Local Businesses
There is no better and faster way to gain a competitive advantage in new markets than by creating an ecosystem of complementary products and services delivered from local relationships.
These third-party relationships will support your organization to scale while simultaneously reducing financial risks.
Bonus tip: Test your strategy first
Taking baby steps towards international expansion is the way to go.
If you are a US-based company, then start to export your services or goods to a geographic that is similar to your existing.
Canada is a preferred choice for many as its proximity, cultural and language similarities make Canada a good proving ground for Us companies starting to venture across borderlines.
When to Expand a Business Globally?
Taking your business to the next stage in its development isn’t going to be a lot easier than starting one from scratch.
To be a successful entrepreneur in worldwide markets can have huge rewards but is attached to a lot of risks.
Use the following to determine if you are ready for international expansion.
You have the money
Setting up a business in new territories will require money, often a lot of it. You will need the resources to carry you through the ramp-up phase of your expansion.
The beginning phase of your international expansion will usually include investments and costs that will not see any returns for a long time.
Be sure that your business is proven to be profitable and has sufficient positive cash flow to whether the often difficult start.
You have customers who love you
Your existing customers are the best source for information on whether you are ready to expand your business.
If multiple customers are asking you to open a location or offer your services to a specific region, do not ignore it – its time for some homework and research.
Another way your customers can indicate that you are ready for expansion is by their actions. Do a lot of customers take on the additional hassle to get a hand on your product overseas? Have they turned up time and time again?
If you can answer these with yes, it is a strong indication that your business might be ready to expand.
You have a proven track record
If you are someone who has successfully set goals and systematically ticked them off one by one, you might be just the right person to tackle the complex task of expanding a business globally.
Reaching milestones on time or ahead of schedule is a great indication that your planning skills are compatible with even the most complex tasks.
Before planning your expansion process, always make sure that your industry and market is favorable for you to enter.
You have the right systems in place
If your current business completely relies on you being physically there or for you to manage the day to day tasks, then it might not yet be the right time for expansion.
Going global ultimately means giving away managerial roles to other individuals and handing over key responsibilities.
If you had to hire new employees tomorrow, would you have the necessary training material to guide them? If your business takes off and you suddenly double your customer base, are you able to handle the new demands?
The expansion will take effort and, most importantly, time. Be sure that you have sufficient of it. Ensure to realistically determine future workload and ways to successfully offload some of it to well-trained new employees.
An opportunity Arises that’s just too Good to Pass Up
There come times in which you will need to expand your business to seize opportunities before they pass.
An advantageous entrepreneur will seek up opportunities wherever they are. If you find a demand that is not being met, you may need to expand your business fast.
In life, as in business, rarely does everything go straight up to plan. Be flexible and adapt when amazing opportunities come knocking.
If you find the perfect product-market fit, you will seldom have the luxury to wait and see how things play out.
Example In the aftermath of a disaster often lies opportunity.
Daniel Ek saw that opportunity with the fall of Napster and other file sharing Networks in the early 2000s that have previously profited from what is now considered copyright infringement. Elk saw a potential way to profit from this change in market conditions.
If only a tiny percentage of all the people listening to music illegally be willing to pay a small fee for legal consumption, then he would be golden.
Well, fast forward 14 years, and we can say that his intuition and prompt action has proven to be the right.
Strategies to help your business flourish in Foreign Markets
Taking a business to the international stage is a challenging task, especially for small business owners on a limited budget and little to no international exposure, but that in no way means that you cant go international.
Technological advancements and the rise of social media have created a great basis for ambitious and eager small business people to step on in their pursuit of international greatness. What you need to do is to properly strategize and prepare your business well for the global audience.
Diversify into different markets
There are two approaches to expansion:
Invest big in one country or investing small in multiple countries.
Both approaches have their merit. Investing a significant amount of your money into a single international market will enable you to effectively compete with dominating local companies effectively.
If things go your way, you can grow quickly and continue expanding to other markets. The downside to this strategy is if things do not go your way, your entire investment will start to fall apart.
Investing in a well-diversified manner has the effect that your products will be available in multiple markets.
You will be investing a small portion of your capital into different locations and probably won’t be able to compete at the highest level.
However, your small investments have the chance to steadily grow until they can compete with the big players in your niche. In this case, if one of your investments go south, only one of your investments will go down.
For small businesses diversifying your investment is the most realistic route to take.
Apply for Financing
Found an opportunity that you can not miss out on?
Insufficient capital is a major hindrance to many small business owners when it comes to international business expansion. The surest way to get around this hurdle is to apply for low-interest financing from private and government lenders.
If you want to apply for funding, you will need to prepare a flawless and well-researched business plan to convince possible lenders to invest in your dream.
Excellent Customer Service
This goes without saying, but the last thing you want to do is to deter international customers when you desperately need them.
Word of mouth advertising is proven to be effective, and making use of this should be one of your main goals.
A negative chain of bad comments and reviews is something you will have to avoid for your business to flourish.
How can you ensure great customer service?
The answer is mostly simple. Deliver what you promise or, better yet, excel on your promises. Deliver your goods on time, ensure ideal packaging, make sure your products arrive in perfect condition, and if you can do not charge for delivery.
If there is an inquiry, make sure you are easy to contact, and in the case of damaged goods, make it easy for your customer to get a replacement.