As an entrepreneur, you thrive on expansion.
In fact, your business is not really a success unless it is always moving forward, capturing the hearts and minds of new customers and tapping into ever-increasing profits. After a while, geographical confines become another barrier to break, and foreign markets may prove an irresistible temptation.
However, diving headfirst into the waters of international business would a mistake. Here are a few tips to keep in mind as you ponder the possibility of going global.
1. Develop your strategy
Think back to when you first launched your startup. The seemingly endless logistical planning, the hours of research into your chosen market, the spreadsheets and notebooks full of ideas and numbers — all of that will multiply into an even more intense period of preparation should you choose to target a market that is foreign to you in the truest sense of the word.
Gain a reliable sense of the size and scope of the market in the desired area, harvesting data with as much specificity as possible. Be sure to factor in any existing businesses that would be competing for it, paying close attention to what they are doing right — and where they might be going wrong. Look to your own domestic performance as a measure of your ability to compete.
Among the necessities on your strategic checklist will be several forms of financial analysis, including market segmentation (to understand the demographic distinctions among your prospective customer base), gap (between your current and desired states) and SWOT (strength, weakness, opportunity and threat).
Your business will also need to be in a healthy enough position to allow you to afford the various initial outlays involved in establishing yourself abroad.
2. Know the language and culture
No matter how solid your market analyses, there is no way to understand a foreign market without making a conscious effort to familiarize yourself with the location itself.
At the most basic level, this can be accomplished through extensive reading of books and articles on the country in question — but there is really no substitute for scouting expeditions or, better yet, extended stays. If you travels take you to Europe, for example, consider attending one of the many great startup events there.
When a country catches your entrepreneurial eye, pay attention to everything that makes it different from your own. Cultivate a respect for local customs, including those that might appear strange or off-putting to you.
And, perhaps most importantly of all, attempt to communicate with locals in their language, even when you are certain that they know English. Not only will the effort be appreciated; it will also function as a key to further insight into the psychology of the region. English may be the “business language” of the word, but to rely upon it exclusively is both lazy and arrogant. The real advantage lies in deeper immersion.
Simply put, anything you can gather about the target country — its culture, its language and the intersections between them — will help you piece together a bigger picture of the market to be tapped.
3. Make the right connections
Even the most airtight mathematical and cultural grasp on potential business operations in a foreign country means little without a human element! If anything, your networking skills will matter more when doing business internationally.
After all, it takes a strong network to hold steady across the vastness of oceans. If you lack the ability to establish friendly and supportive working relationships on a global scale, then you will need someone on your team who can — and finding this person itself entails a certain type of “people skill.”
Consider the types of contacts that you may need to operate in another country. If you fall short of full fluency in your attempt to learn the language, then you will need an interpreter to interface with new business partners.
If you deal in tangible goods, then you will likely need to connect with a local distributor — a process that is challenging enough in domestic contexts. Then there is the connection with the customers themselves, with whom you will need to reach out, whether person to person or via broader marketing efforts.
4. Facilitate smooth transactions
Once relationships have been established and you are ready to move forward, your constant responsibility will be to maintain an effective infrastructure, ensuring that customers and partners want to continue doing business with you — all while remaining in compliance with local laws and regulations.
One example of organizational readiness can be seen in the handling of money. More specifically, it is important to have an FX (or foreign exchange) strategy in place before currency changes hands internationally.
For instance, moving money from France to the UK would entail conversion of euros to pounds, wait times, fees and other considerations. But regardless of where in the world you seek to do business, look to keep fees to a minimum – the lower your cost of doing business, the better – and to effect transfers as quickly as possible, since you will be receiving and sending funds across national boundaries on a regular basis (perhaps even multiple times a day!).
Take some time to compare the advantages – and disadvantages – of multiple services, because choosing the right one is essential to the success of your globally minded startup. In many cases, it would be no exaggeration to call it the factor that makes or breaks your ability to turn a profit!
The right balance
No matter what kind of business you are thinking about expanding, each of the above principles will play a role. Expect to find yourself in the difficult but ultimately rewarding position of balancing your time and mental energy on logistical, interpersonal and creative areas, always aiming for just the right mix to ensure startup success beyond borders.