The idea of selling your products or services to new global markets is an attractive prospect for any business, large or small. But while reaching new customers and unlocking the potential for further growth can seem exciting initially, adapting your business to foreign markets is no small feat.
Factors such as cost, communication, and cultural differences can all affect your business’ success when going global. This guide will explore some of the key considerations to make when you’re thinking of expanding your business overseas.
Monitor your financial position
You should regularly monitor the progress of your business. On a daily basis, you should know how much money you have in the bank, how many sales you’re making, and your stock levels. You should also review your position against the targets set in your business plan on a monthly basis. Growth for businesses abroad is often a slow process; establishing products and services in other countries takes time, so you will need to factor this into your planning. A thorough analysis of domestic and international markets should always be undertaken before deciding to expand your business overseas.
Develop a strategy and business plan
Each market has its own nuances due to economic, cultural, governmental, and market conditions. It is important to develop a localized strategy and business plan that drives local success while remaining integrated with the overall corporate strategy and objectives. A business plan will establish where you are and where you want to go over the next few years. It should detail how you will finance your business and its activities, what money you will need, and where it will come from.
You also have to think globally right from the start. Raising money for a global business is complex, but there are so many sources of finance. You need to understand the breadth of options and get someone who can help you navigate the various sources with imagination. And this vision should also guide you on the practicalities of locating in the correct jurisdictions, taking tax advice, understanding your competition, and ensuring you have deep insights into the customer needs that can allow you to scale.
Get the right funding
It is essential that you choose the right type of finance for your business, each type of finance is designed to meet different needs. Smaller businesses usually rely more on business overdrafts and personal funding but this might not be the best kind of funding for your company.
Establish close relationships with local businesses
Gain a strong competitive advantage by creating a supporting ecosystem of complimentary products and services, which can come via third-party relationships. These relationships can support the scaling of the organization while minimizing financial risk.
You can start by negotiating alliance/partner/distributorship programs, developing an ecosystem strategy and business model, and building an internal alliance team to manage and foster relationships. Expanding your business overseas is not for the fainthearted, but for most businesses, it will be inevitable as global markets offer greater opportunities for growth. By paying attention to details and outsourcing administrative functions, the difficult job of “going global” can produce great results.