10 June 2020
The world is a much smaller place than you think. Whilst it’s easy to feel that someone who lives thousands of miles away on a small island in The Philippines is not going to have anything in common with your customers back home, today customers all over the world have similar wants and desires.
By selecting the right product that meets these universal traits and adapting it to markets all over the world, you can ensure your business reaches new heights.
Here’s how you can set your business on the path to global expansion.
Why Go Global?
It’s a fair question to ask whether going global is right for your business.
Relying on one market too heavily is never good financial advice; spreading your load across expanding markets in South East Asia, Europe and China are all sound ideas.
However, companies looking to expand globally require in-depth research of those markets and potentially a logistical nightmare in terms of currency, export and import duties and global shipping. If your product only has value in the United States or Europe and are skeptical as to where there is a market elsewhere then you need to ask yourself whether it will be worth doing business internationally.
Remember there are lots of risks involved in a business going global.
Live and Breathe the Culture
Even if you have an online business, you also need to think about whether you want to go and live in the country you are expanding into for a while.
Depending on how you see it this is one of the perks or downsides to international business expansion.
It is important to have local contacts in that country in case anything goes wrong with your business – perhaps you are going to need to employ a local manager to work on your business full time or you just need a local contact to turn to for advice.
You also need to get a feel for the culture. If you don’t understand the country you are selling in then how can you understand what is going to make the locals want to buy your product?
Learn the language and be sure to have someone on your team who is a fluent speaker to help with translation issues.
Is Your Product New to That Market?
Introducing a new product to a foreign market that sells well in Western markets, even if you think it will eventually sell in that market, can be difficult because you have to educate your customers about what your product is and how it will be of use to them.
Be prepared, therefore, to spend a lot of time building up the reputation of the product and thinking of innovative ways of explaining what it does. It could take many months, perhaps even a year before you are able to see any return in new markets.
The Infrastructure
If you are going to be transporting your product around a country in Asia or Africa then it is important to have low expectations about what is achievable in terms of delivery costs.
If the country does not have developed roads or a fast railway system and you are relying on local drivers, then you are going to need to either think of a solution or account for the lack of infrastructure in your business plans.
If you are considering setting up an office in the country whose market you wish to enter you are also going to need to think about a suitable location and who you are going to employ.
Hiring A Western Team
Not all cities are going to have suitable buildings nor will they have facilities that cater to Western standards of living. Some cities may not always be safe. You may have difficulty finding workers from the West to go and work at your new office.
If you do find some people willing – perhaps current employees – you will have extra costs such as relocating them and offering them adequate houses or apartments. You may find you have to offer high pay to encourage them to follow the business out.
Hiring Locals
If you decide to hire locals then you will need some expertise of how local employees work: what rate they should be paid, what their work ethic is and if they are going to be capable of doing the jobs you need doing to help expand your business.
Working with a local can often be a key component a global business needs to succeed.
Currency Fluctuations
One of the problems with doing business in a foreign country is that their currencies tend to bounce up and down a lot more than Western countries.
Inflation has often hampered the local currency so $1 can be worth thousands or even millions.
This is often caused by a lack of political stability and unpredictable events. Contingency planning is much more important than it is in the West. Your projects could be worth one sum at the beginning of the week and another figure at the end of the week. This could have a huge impact on the business and needs to be thought through.
Global Expansion – Do Your Research
The most important thing to note about planning for your business’ global expansion is to research thoroughly. You don’t, for example, want to fall foul of national security rules.
It is also not enough to learn about the market from a computer screen. The statistics cannot tell you about the human situation on the ground and how your business will work in practice.
Making local contacts and going to live in the city or town you are hoping to expand into is often the most sensible way of ensuring everything goes smoothly. Product research is also very important
If you’re thinking about expanding your business to the rest of the world be sure to take our quiz to help you find the perfect solution to your business needs in 30 seconds.
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