Top Considerations When Expanding Your Business Overseas
Don’t be blinded by the promise of increased revenues as a result of expanding your business overseas. While it’s indeed a tested and proven way of generating higher brand interest and profits, there are challenges that come with this strategic move. It is important to weigh the risks and the reward of expanding your business overseas. Entrepreneurs should never make the decision to expand overseas on impulse. Rather than approach it as a sprint, think of the transition as a marathon, gradually but surely laying out the foundation for your brand in new markets. Taking the time to build a solid foundation will prove very lucrative in the long run. Here’s five most important considerations you should address beforehand.
Is Your Product/Service Needed?
Can you know for certain that a customer base awaits you in the country you want to expand to? Mere positive thinking that you’d get the same success and warm feedback wherever you choose to expand to can be a financial detriment to your success as an entrepreneur and to your business’ survival. Do some research to test the market before investing in expansion. Expanding to new markets means you’ll likely be spreading your resources too thin. If your new location gobbles up resources without any significant revenues being returned, this can unfold into a financial disaster in a matter of a few months.
Is it Congruent With Your Current Market?
It’s important to think of the expansion from a strategic standpoint. It’s rarely as simple as building new facilities in new locations and then recouping expenses through sales and profits generated per annum. If you happen to expand to a market that is partially or entirely different from the domestic market your brand has enjoyed the company of for many years, it will be difficult if not impossible to gain traction with who your target audience should be, what business model and marketing approaches should be implemented, and what results are to be expected in the next five to ten years.
What Insurance Policy Do You Need?
Sending local employees overseas makes you responsible for their health and safety. Your business is exposed to risk when employees operate in international territories, either while on business travel or as part of your worldwide expansion. Having the right insurance policy cushions the financial impact of any unfortunate and unforeseeable calamities that may happen in your international locations. Shop for insurance quotes from your local insurance market. Many of these local insurers provide overseas coverage or are connected with independent insurance agencies and brokers in the country you are planning to expand to.
What are the Language and Cultural Barriers?
Language and culture can either work for you or against you. These variables are deeply rooted in every human being and act as the main drivers that control a person’s thought process and decision making. If you can relate to your target market’s culture, it will be easier to bring them on board. However, fail to adopt their cultural practices and contrasting linguistics, and your business will surely take a hit. Identify these cultural and language barriers that exist. Can you solve them simply by studying the language? Do they have deeply embedded and incurable cultural preferences or biases that will make it difficult if not impossible for your business to thrive? Initially you might want to consider a native email marketing agency to help you better understand how to connect with your new market and get you started on the right foot marketing-wise.
Do You Have Access to Manpower and Materials?
It’s inefficient and unrealistic to transport all the raw materials and workforce you need from your headquarters to your new business location. The logistic fees alone can render your business inoperable from a financial standpoint. Learn the country’s local market. Do they have an abundance of talented professionals whose expertise and skill set you’ll need? LinkedIn and other social media platforms have made it easier than ever to find the right people. For example, technology specialists are very prevalent in Asian countries, and startups who are looking to expand there can find themselves with dozens of eligible candidates to fill IT and software engineering roles.
Expanding a brand overseas isn’t always a happy ending, nor should it be treated as a linear path. Be prepared to adapt to new market competition, audience characteristics, marketing policies, and legal expenses. Answer the questions above as clearly and as detailed as possible before any actionable decisions are made.