Long ago, taking advantage of market peculiarities in different parts of the world and starting a business abroad was easier, less risky and economically stronger than setting up a business in your home country. There are ample opportunities in emerging markets for small (or large) business owners with a skill set that is different from the local population. Having built a loyal customer base on its national territory, international expansion could be the next step in keeping your business growing if you know how to take the necessary steps. Randall Castillo Ortega, the founder of RACO Investment, provides tips for growing a business internationally in the new year.
Becoming a global company is an impressive achievement, but not all businesses are designated to achieve that challenge. There are many things you should think about before you sell and market your products or services in another country. For example, do you have a lead base in the foreign markets you want to enter? A product that sells well in your home country does not necessarily have to have the same appeal in another country.
First, make sure that your customers exist in the countries you want to expand. Are there any needs in your offer? Don’t think you can – make sure you will. Says Castillo, “While the business environment will not be identical to your home country, you must be familiar enough with the market to be able to hold business discussions without any problem.”
Consider trade barriers, proximity, currency and culture. Look for homogeneity; the fewer differences exist between your country and the country you export to, the easier it will be to do business with that country.
Hire bilingual staff so you can translate for your consumers easily. If you don’t have a budget to hire full-time translators, you can outsource tasks like overseas customer service. Different cultural norms are another obstacle. Make sure to investigate cultural practices in the countries where you plan to expand – the needs of foreign clients and business partners are probably different from those of national stakeholders.
Learning different countries’ tax aregulations, business laws and packaging standards can be challenging. Foreign banks may also be reluctant to deal with a country-based account with a lot of administrative burden, so you may need to set up a foreign business entity and an account to make transactions. In addition, packaging rules are different from country to country. In some countries, companies only need to include instructions that are in English and perhaps Spanish.
Abroad, doing business is both a personal and professional event. Things will always take longer to be resolved abroad, but that’s not necessarily a sign of lack of momentum. It’s important to be patient and ready for multiple interactions to build trust.
It is not easy to persuade a foreign customer to trust their brand when a similar product is made in their home country. While some large chains have influence abroad, small and medium-sized enterprises need to work harder to convince the international market that their brands are reliable and better than the competition.
If you plan to expand globally, you’ll want a great team and partner. Even if your “partner” is in the form of a mentor, you’ll want someone you can trust who can testify to you. You’ll need someone who has a passion for your brand, who understands the local market, has industry experience, has the capital needed to grow, and ideally has additional businesses where they can leverage shared resources.
Instead of just thinking about how customers in your own country might get their new ideas, you’ll need to think about how foreign customers will get their ideas. Explains Castillo, “Time zones, language and cultural suitability have to be considered when you branch internationally. If you do not do so in advance, you run the risk of offending your international partners apparently being more concerned about them yourself.”
Stay consistent with the brand, but adapt to the environment. Cultural norms and customer needs vary in foreign countries where you may require an adjustment in your sales approach, or even your product. While you should stay true to your brand in general, it’s important to adjust your product offerings to take into account your local tastes.
Before making important business decisions, you should think about all possible scenarios, especially during international expansion. It is advised to travel to the country or countries in which you want to expand, and get a first-hand idea of how your business will work. This will give you the opportunity to conduct research and test your product in the foreign market. Investigate every aspect of your business strategy. Explore various alternatives and safeguards, do everything you can to understand the markets you’re entering, and take your time to get it right.
Spending thousands of dollars on a business degree or MBA is not the only way to prepare for the opening and operation of a business abroad. Concludes Castillo, “While studying the business can be profitable, the years you spend in the classroom could be productive, producing years of income, if you select your market and jurisdiction carefully. Starting your own business abroad will certainly require due diligence, but with less than $1,000, becoming your own boss isn’t as difficult as you might think.”