Your business is doing well in your country. But, you want to go global.
What are the steps to go global? What does it take?
First: evaluate whether their business is truly ready to grow before developing an international strategy. She said to plan ahead, monitor your market share, and try to figure out if it will support a move into new foreign markets and create more long-term business opportunities.
Second: Take a look at finances and honestly ask yourself if you have the funds to support the initial investment and sustain the growth you're forecasting, If the answer to both is yes, then it may be the right time to grow. Remember, success won't be immediate, so you'll need to factor that into your plans.
Third: One of the biggest considerations has to be whether your business can actually build a strong customer base internationally. A product that sells well in your home country may not have the same appeal in international target markets. Make sure your customers exist. Is there a need for your offering? Are they inclined to purchase? Don't think that they might – know that they will.
Forth: Another initial step is to conduct some significant research into the country you want to expand to. Don't discount the importance of education on both sides, in both your new market and your homeland. You must understand the direction your new city is going in and leverage that momentum to support your expansion, whether it's logistics, banking, or a talent base."
What are the challenges of going international?
What are the challenges of international business?
No major business decision is without its hurdles, but global expansion comes with its own unique set of obstacles. Here are some challenges you should prepare for before expanding internationally.
Language and cultural differences
Taki Skouras, co-founder and CEO of international wireless accessories retailer [removed] , suggests hiring bilingual staff members who can translate for your company.
"If you don't have the budget for full-time translators, outsource tasks like overseas customer service," he said.
Josh Robinson, vice president of franchising and development for [removed] – an optical franchise that has 500 locations throughout North America, including about 60 in Canada – said it is important to understand that there may be cultural and language differences within a country.
"Just as you expect differences in residents of California, the Midwest and New York, you need to understand the nuances between Vancouver and Calgary [for example]," Robinson said. "You probably expect differences in laws and languages, so you would hire a lawyer and translator from the country you are moving into. But you also might need a local person's perspective to understand how the culture and even taste could affect the market for some consumer goods and services outside the U.S."
International compliance and regulatory issues
Learning the different tax codes, business regulations and packaging standards in different countries can be challenging. Trevor Cox, chief financial officer for [removed] – which has offices in the U.S., Canada and Australia – said compliance was the biggest challenge DataCloud faced when expanding overseas.
"In Australia, compliance was a major headache," he said. "It took months to complete the necessary paperwork for compliance and setting up a corporation."
Foreign banks may also be hesitant to deal with the administrative burden of a U.S.-based account, so you may have to set up a separate foreign business entity and bank account to make handling transactions worthwhile for the banks.
"It took just as long to set up a local bank account, with many banks declining to work with us because we were too small," Cox said. "We had to switch to an international bank, which had offices in Australia."
Stanley Chao, president of [removed] and author of Selling to China: A Guide for Small and Medium-Sized Businesses, said products have to be localized. This means different packaging, foreign language instructions, different voltages, etc.
"The issue here is that you need a local person familiar with your product to suggest these changes," Chao said. "Don't think you can just resell your U.S.-targeted product in a foreign country."
Paris said packaging standards are different from country to country. In the U.S., companies only need to include directions in English and maybe Spanish. "But in Europe, your instructions, even for the simplest product, will be in multiple languages, sometimes up to 24 languages. If your product is sold more regionally, you will have to consider the increase in packaging cost associated with labeling."
In America, the business world moves quickly. That is not necessarily the case in other countries.
"Overseas, doing business is as much a personal event as it is professional," said Bill Bardosh, CEO of green materials and chemicals company [removed] . "Things will always take longer to be resolved overseas, but that isn't necessarily a sign of a lack of momentum. You have to be patient and prepared for multiple interactions to build trust."
It's not easy to persuade a foreign customer to trust your brand when a similar product is made in their home country. While some big-name U.S. chains have clout overseas, small and midsize companies need to work harder to convince the international market that their brands are trustworthy and better than the competition.
"Why would [customers] buy from you over the local champion?" Paris said. "Can you penetrate the market? If you do, can you be profitable under the circumstances?”
International expansion advice and best practices
If you feel you're ready to tackle the challenges of international business, follow this advice from business leaders who have been in your shoes.