While it can be very lucrative for your company to expand over global markets, it can also be detrimental to profits if you are not in a position to do so. So how do you make the call for your business?
One of the first things you need to ask yourself is whether or not your business is ready for international expansion.
Are you ready for international expansion?
Although it can be part of what helps grow your business in the long term, the leap into new global markets can be a difficult one. That’s why it’s vital to know whether or not the decision is the right one for you. Here are a few questions to ask yourself.
Does it make financial sense for your company to enter into global markets? This is a huge investment into your business, so you’ll need to budget for things like international marketing efforts, customer service support in local languages (during local business hours), and setting up an international office with management teams and support staff, as needed, among many other details.
Is there a genuine market for your product? Just because a product or service sells well in the United States, that doesn’t mean it will sell well overseas. Find out whether or not there is a market for what your company offers so you can be confident in your ability to hit the ground running when you head overseas.
Have competitors gone before you but failed? Research why. If you can learn from their mistakes, you’ll be more likely to have a successful launch! Make note of these things and improve upon them before you expand into the same overseas markets. However, if there is genuinely no market for your product or service where you are looking to expand, you may want to reconsider, or pick a different target market with more interest in your brand’s products or services.
What are the advantages of taking your business global?
If you find that you are ready to invest the time and money into expanding globally, you may be wondering about the benefits of expanding your business in new markets. Here are some of the most appealing advantages for doing so.
Increased sales and profits. Expanding your customer base by introducing your products or services to other countries and regions creates huge possibilities and the potential to bring in more sales revenue over the long term.
Sustainability. Your U.S. market may be a large one, but by expanding globally, you no longer depend solely on this market for your success. If sales slow here in the U.S. due to economic reasons, or if a competitor launches something new that results in decreased sales for your company, you will feel less of an impact if your global efforts are turning a profit. This gives you time to regroup and strategize.
Less competition (potentially). If you choose your overseas markets carefully, you will likely see fewer competitors who have expanded to the same areas. And if done correctly, your expansion could give you an edge in making sure you are the leading brand in these markets.
What types of challenges could you face by expanding your business overseas?
If there were no challenges, everyone with the financial ability would already be tapping into overseas markets. Since there are certainly challenges to consider, you’ll want to make sure you are aware of a few potential obstacles before you begin.
Initial investment. This new venture can seem daunting. Even with the best plans, you are still making an investment with both your time and money that could potentially not provide you with a large enough return on that investment if things don’t pan out. Crunch the numbers and determine if your company is truly ready to make this leap.
Local competition. Is your product or service similar to something customers can find produced locally? If so, you’ll need to work harder to gain their trust and invest in translation and advertising to attract these customers so they decide to choose your product over a local version. Focus on what makes your brand unique and how you stand out from similar brands sold locally.
Country-specific hurdles. Taking your business global is not as simple as duplicating all of your efforts in another country.There are many different things you have to keep in mind. Each country will have its own set of regulations, rules, tax codes, etc., and you’ll need to make sure you are creating marketing content specifically for these new customers if you want to be successful. More on that below!
Tips for successfully entering global markets
Learn the local rules and regulations. Each country has their own unique regulations, tax codes and packaging requirements. These rules and requirements will not be the same as what you are accustomed to here in the U.S. It’s important to understand these rules well before you launch, or you might run into some obstacles related to compliance issues.
Get to know your target market, and get to know them well. Whether or not your new customer base connects with your product will be the largest determining factor as to whether or not you succeed. Get to know their likes and dislikes, and make sure you understand their culture so that you can have the best chance of making a genuine connection with your new markets.
Decide on the type of structure you’d like to see overseas. Will you have offices in these countries, or are you just looking to sell your products online? Do you need management teams, or can everything be managed remotely?
Localize your product. Your product should be localized to make sure it is both appealing and understandable for your global consumers. Take a look at things like product packaging, inserts, and instruction manuals. These should not only be translated to the local language, but also localized to make sure it is appealing to those purchasing.
Localize your marketing efforts. This starts before you ever launch in a new market. By drumming up excitement about your brand and new offerings, you can create a sense of brand awareness and loyalty in your new target market. Prepare your marketing materials and make sure they are made specifically with your global demographic in mind. It would be a mistake to duplicate your U.S. marketing efforts for every piece of marketing collateral, since you can’t be sure your message will truly resonate with international customers.
Consult experts. You don’t need to do everything on your own! Find a lawyer who specializes in foreign-market expansion and can help you navigate the rules and regulations. Look for a financial advisor who can assist you with taxes and foreign payments. And utilize a professional to handle the translation and localization of your product packaging, inserts, and website. Having a team of people who can help you overcome potential obstacles and questions will have a positive impact on your success.
No matter how much planning you do, you’re bound to encounter some hurdles when you expand your business abroad. This is normal! Don’t let it deter you if you are determined to expand. Instead, be prepared to adapt your strategy, just as you would here in the U.S. If you’ve already made the leap into global markets, please share your own best practices with us!