Thinking of expanding internationally? Well, there’s plenty of good reason to, especially for small businesses. There’s the potential for increased sales for example, or the possibility of diversification – both of which are attractive draws. If you’re seriously considering it, here are five tips to increase your chances of success.
1. Ensure you can afford it
Let’s not dance around the subject – expanding a business internationally is an expensive business. You can expect to spend tens of thousands of pounds setting up overseas, so you’ll need to be a small business with deep pockets if you’re going to establish a new legal entity abroad. That said, there are low-cost, low-risk ways of taking a small business global, as you’ll find if you talk to a company like Foothold America. So, just double check that your numbers stack up – expansion could mean a major increase in profitability, if you can get far enough through the process to start generating revenue aboard.
2. Start small
Global expansion is possible, but first you’ll need to define what you mean by ‘global’. If you mean selling in every continent on the globe, for example, pace yourself and start by succeeding in one market at a time. Every country you sell to – and sometimes every region within the country – will warrant taking a different approach, and you’ll find that you boost your chances of success by not forging ahead with a ‘one size fits all’ approach. Here’s how to select the best country for international expansion if you’re unsure where to begin, or want to confirm you’ve thought about it from every angle.
3. Think about logistics
Once you’ve established that you can afford it and have found a location to target, it’s time to conduct extensive market research to confirm there’s an opportunity for your business. If you’re confident you have a target market to sell to, think about how you’re going to fulfil those orders. You might need to outsource the work or take on new employees depending on the nature of your business, but essentially, this step is all about not rushing in without thinking about what you’ll need to scale up or reorganise in order to deliver.
4. Build relationships
An international expansion is going to require taking advantage of the skills, qualifications and experiences of others in your industry. After all, you can’t expect to have the breadth or depth of knowledge needed to pull it off on your own. So, seek the services of lawyers, accountants and tax consultants, but also see if you can find businesses who have already made the move to your chosen location. Businesses who have managed the move successfully will be able to teach you a lot, and forging a long-term relationship with them could pay dividends now and in the future.
Also, consider getting in touch with local government bodies – some countries have dedicated departments to help foreign businesses, and you might find that they’re able to refer you to distributors, manufacturers and other third parties that could be critical to your success.
5. Move to congruent markets
Once you’ve achieved success in the first country you’ve expanded to, (whatever ‘success’ means to you), look to expand to countries with similar markets or regulatory environments. For example, if you’ve had success in Germany, consider exploring other European countries – legislation and similarly significant factors tends to be shared across the European Union, which can help to make the process of continuing to expand a little cheaper and faster than heading to Asia, for example.
This is just the tip of the iceberg when it comes to setting up your business overseas. Keep researching and finding out as much as you can: as they say – knowledge is power.