The time has come to get serious about international expansion. Maybe your growth has plateaued at home. Perhaps your international customers are demanding it, or you want the insurance of a different market that reacts differently to economic trends. No matter your reasoning, there are a few factors you have to consider before making the big move to ensure success. If you don’t, your expansion could end in disaster.
Here are six key steps for making an informed and successful overseas expansion:
Stop dreaming, and make a decision. In any undertaking, the first step is the hardest, but if you’re motivated and truly believe your business will work overseas, make up your mind. No one is going to do it for you.
You’ve been looking at a new market for a while, and on the surface, it’s appealing. Now look at it critically. What are the dangers? Does its government tangle everything in red tape? Does another company have a monopoly? Is there too much competition? Does the economy suit your product and retail prices? If no one is offering your product or service, why not? These are just a few of the questions you need to consider.
3. Test the market
If your research has promising results, test the new market. Before my company entered the U.K., we advertised online but directed all enquiries to our Australian team. A few people worked late shifts due to the time difference, and we set up virtual numbers, but other than advertising, we didn’t have any additional expenses. Get a few months under your belt, and crunch the numbers to see how much potential profit you’ll make. If the results are favorable, move on to the next step.
4. Support your team
We hired two employees to start things off in the U.K., but our home business provided most of the support. It launched a local website, designed graphics and promotional pieces, and provided the majority of the administrative behind-the-scenes work. This allowed our small team to focus on sales and front-end growth until we were ready to go all in.
Getting a full year of trading under your belt is crucial, and it will allow you to observe seasonal changes. In the travel industry, for example, people travel more at certain times. We were able to map out the highs and lows of the trading year so we weren’t overly exposed if the seasonal low was too low. If you remain small, you can exit easily and cheaply.
6. Grow slowly
Don’t grow too fast. You want to break even as fast as possible to reduce the financial pressure on your home business. However, unless you have large cash reserves you’re willing to risk, you want your new business to build its own “rainy day” reserves.
A new company in a new country needs just as much — if not more — attention than your domestic company. At each of these stages, you have to understand your new role. After all, you can only be in one location at any one time, so you have to expertly manage the new and the old simultaneously.
Don’t become complacent when it starts to make a profit and assume it will grow itself. You made your company back home what it is today, and with a little patience and a lot of attention, you can do the same abroad.