Mark Pearson, Founder of MyVoucherCodes.co.uk, discusses the four key factors business owners must consider before trading abroad.
Naturally, business owners will explore ways in which to increase the brands reach and it not uncommon to look at new geographical territories to fulfil this ambition. Moving outside of your domestic market presents a whole host of opportunity to deliver the growth aspirations, but an expansion of this sort doesn’t come without hurdles.
Unless your product is particularly unique, there is likely to be a company already operating in the country you are considering that is focusing on the same market. They may have logistical advantages as well as a level of brand recognition and local traction that you need to challenge but utilising your knowledge from your domestic market will put you in a positive position. Depending on the size of your company and the scale of the incumbent competitors, exploring a merger or acquisition may help to get the foundations in place.
The world would be a very boring place if there was one global culture! Understanding the culture and market conditions are crucial before entering a new territory; does the problem you are solving (at home) even exist in other areas of the globe? Sometimes a small tweak to your product or service offering to localise it will be the difference between success and failure.
If you’re reading this, the chances are that English is your native language. The worlds’ willingness to communicate in our language generally makes us complacent at best (lazy at worst) when it comes to linguistic skills.
Communication is the underpinning of business operations so any language barriers should be dealt with at the start. Do you have someone on your team who is competent enough to communicate effectively? The ability to order a drink when on holiday is substantially different from understanding the implications of a contract that falls under an alien legal system. Investing in quality, local advice and support is a necessity for nearly all situations when you start to operate in a new country.
Do you manage operations of your now-global company centrally or have teams on the ground? This very much depends on the type of business you are and the scale of the operations that are being handled. Ideally, a senior manager from the core business would spearhead global expansion and setup the in-country management, however, this is often extremely difficult to action.
A standalone office that is overseen by remotely possesses numerous challenges so be sure to be clear on the processes around monitoring performance, reporting and making strategic decisions for these satellite offices.