Last update: December 7, 2020
Moving your business abroad, to new territories, possibly across a continent gives you a much bigger market to play with. Of course the financial reasons are apparent, taking this decision usually only comes as a result of existing sales or a strong presence. But selling your products, services, or business abroad is one thing, setting up and having boots on the ground is entirely another. There’s a lot to consider beyond business, families, languages, partnerships, sales, and marketing.
Here is some of our advice based on the clients we’ve helped.
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Localise your business practices to your target market
Don’t expect your existing business model to remain the same. Be open to change and absolutely avoid the thinking that what works at home will work for your business abroad. Embracing change as the business climate is better understood in the target market can lead to better profits at home. There are challenges faced, such as access to mobile technology, that will mean new ideas will have to be discussed.
But external, client facing localization is just as important. To support your employees, they will need every tool at their disposal if they are going to make a success of an international project. This can be from the social networks used in the target country, (WeChat in China, for example) to the currency symbols used on your pricing pages.
Grow your business abroad with a local admin or partnership
Partners in local countries bring brand awareness to your business, it’s that simple. Make list of potential partners and talk to them about their business and what they can do to help. You will overcome a list of issues if you put your trust in a reliable partner
The biggest barrier for a business to overcome is communication. Cultural differences and consumer behaviour make frustrating markets even for established businesses. To get your foot in the door, language and communication is the pillar of it all.
Think you’ll beat out the incumbents on service quality? If you sell on price, what’s the point of the project? Without the ability to communicate with potential partners and clients, without language you will not earn trust. Start thinking locally.
Don’t rely on inbound, get someone on the job
Many people quickly jump to technology, for obvious reasons due to its immediate penetration into markets where you may not eve have a local presence. But the key technology that will define the success of your project will probably be the humble telephone.
It’s easy to look at global megaliths such as AirBnB and believe that the internet will bring in the profits to your business model. You remember how your business started, so don’t expect anything different abroad. Get the best salesperson in your company to vet and hire a local rep and get them on the phone.
Larger businesses acquire there smaller counterparts only for the door-to-door sales that those companies have sweated through to grow their businesses in the first place. Having a hunter, that dedicated salesperson to chase down leads, create new contacts, and hit the phones to bring in early adopters is essential, forget inbound, don’t rely on web forms, reach out.
A barrier isn’t always what it seems
The term barrier to entry is widely used on this topic. It plays on the challenges; incumbent businesses, culture, competition, behaviour. But there is a sliding scale here. Lower barriers to entry imply greater challenges and greater opportunity. If there is no barrier to entry, you could assume there is a reason. High barriers to entry imply the market is alive, business are trading, and the competition is high, just like in your domestic markets, it shows that cash is flowing. Look at the competition, if it’s not there, think long before you decide to enter the market.
Global and local go hand in hand
Groupon, though an international powerhouse, relies heavily on local business. This means presence is required to make connections in local markets, and higher investment and setup costs. Behind the snazzy apps and fast webpages, there is a huge underbelly of more traditional operations that bring value to local customers. We’re reiterating the need for local presence but this is fundamental to businesses abroad.
BEPS (profit shifting) and GAAP (generally accepted accounting principles) are under scrutiny. As tax authorities slowly turn the screw on the tax structures of multinational businesses, startups are forced to follow suit. For all of the right reasons, having a local tax professional to handle duties in each location of your international operations is insurance against hefty fines.
If there’s one takeaway from this article. It’s that you shouldn’t rely heavily on your existing team to make your business abroad successful. It puts pressure on business at home, and it’s less likely to make an impact on your target destination.