Entrepreneurship in international markets
The key to being successful abroad
Being successful abroad is a personal objective for many entrepreneurs, even an obsession. For many companies, export is the key to success, especially for companies that operate in a niche market. Entrepreneurship in international markets is a must for anyone, because the grass is always greener on the other side of the hill, right?
The key is preparation
International business offers many opportunities, but often entrepreneurs return home disappointed, and that is usually due to poor preparation. Going on holiday to Spain or Italy is very different from doing successful business there. The key to being successful abroad is good preparation: This can easily be summarized to reflect before acting. There is no single formula for success, and every entrepreneur must think about what´s the best way to get a foothold abroad, for his company.
Nevertheless, there are a number of key points that can be applied to every industry, service or product:
Immerse yourself in the country where you want to sell your products or services
What works in your home country does not always work abroad. Cultural differences should never be underestimated, not even the cultural differences between neighbouring countries. Take the example of Belgium and the Netherlands: the same language and seemingly similar cultures. It is not surprising that many entrepreneurs think that doing business is done in the same way, but in practice, it is very different. As a Belgian, it is as difficult to do business in the Netherlands as in France or Germany.
Before setting up in business abroad, the country in question must be channelled and studied in a rational and objective way; I often get the typical example of Belgian entrepreneurs who go on holiday to Spain and come up with the bright idea of opening a Belgian “frituur”, a very common and popular food that can be found on every Belgian street corner. No, Spaniards do not like fries! Do you only want to sell to Belgian tourists?
Immerse yourself in the competition
Are you treading a beaten path? How innovative is your product compared with the competition? It makes no sense as a newcomer to try to beat out the established local companies that are decades ahead or you. If the local companies aggressively block the market for foreign competitors, you could be getting into an expensive business. Especially if you are not able to offer an innovative product.
Sometimes (but fortunately not so often) a good research of the competition leads to the conclusion that certain markets are not interesting for your company. The sooner you realize this, the better; you could save yourself from disappointment (not to mention expenditure).
Immerse yourself in the buying behaviour of your target group
How is a product or service purchased abroad? Having a successful sales strategy at home does not mean that it would be suitable abroad. Sometimes purchasing decisions are shifted abroad to a different level. Sometimes other sales procedures are used. Sometimes a certain product is consumed in a totally different way.
I’m going to use the example of a European market leader in the hotel linen sector. When the Spanish company Resuinsa, the manufacturer of luxury bed linen and bathroom linen for hotels, took the ir first steps in the United States, it quickly became clear that their products were purchased in a completely different way than in Europe. In fact, their products were considered and used in a very different way in the US. In Europe and in Latin America hotel linens are purchased in a relatively classic way (A representative makes an appointment with the manager of the hotel for a bulk purchase); in the big US cities it is dealt in a totally different way: The purchasing decision is shifted down to the level of the chambermaids, who buy towels almost weekly with a company credit card in small quantities, box per box, per dozen, to keep the stock level up to standard. Only after Resuinsa had adjusted their sales method and supply chain did they start to become successful in the United States.
Provide the financial means for being successful abroad
Being successful abroad is expensive. Many entrepreneurs ignore this. The first results are only slowly visible. Abroad, your brand and your products are unknown, and it can take up to 12 months before the first sales arrive. Exporting is an expensive business and must be financed in the right way. Fortunately, government agencies can help. Belgium has FIT (Flanders Investment and Trade - the Flemish Agency for International Business), Spain has ICEX (Spanish Institute for foreign trade), and most European countries have similar bodies that give their exporting companies a boost with advice and action.
How can you successfully get your business started abroad?
The fastest and cheapest way to get a foothold abroad is to work with a local partner. This is usually a local company from the same sector that sells similar or complementary services or products. But it can be full of pitfalls.
Often you get to know the local partner at a trade fair or through a government or export agency, and the first impressions are usually fantastic. The first business meals are fun, and the promises are beautiful. But often the results remain below expectations and the first tensions quickly rise. Because of the usual exclusivity clauses with the local partners, many companies quickly find themselves in an uncomfortable situation.
The best way to be locally present abroad, without putting your destiny in the hands of a local partner, is the creation of a local entity. In this way, you keep control yourself. This can be done in various ways, from cheap to (very) expensive.
Sending an expat abroad
Usually, sending an expat abroad is the first step that companies undertake. An expat will be sent with the main task of prospecting, lobbying, market research and promotion. The expat is housed in a temporarily furnished apartment and usually works from home or from a coworking space.
Starting a local office
A local office is an extension of the head office but not a separate entity. A local office employs a local specialist who takes over the local sales and distribution. The person usually works from a private office in a business centre.
Starting a local company
A local company with an in-house legal employee is often necessary outside the borders of the European Union, where other currencies and import duties are in force. In order to sell their products and services on the local market, according to local customs (currency, delivery times, payment terms, stock requirements, etc.), entrepreneurs are forced to open a local company. This is obviously an expensive operation, with many formalities.
The keys to being successful abroad
Translate your website
When creating an international website or web shop, there is more to it than just translating the contents. You must take into account symbols, colours, etc.
Give your customers a local phone number, and ensure proper customer service, in the local language and during local business hours. Provide a (virtual) secretary/receptionist who can answer your clients correctly.
Your company image is the most important matter. Since nobody knows you, you have an excellent opportunity abroad to model your company image yourself. Provide a prestigious business address, preferably in a nice business centre where you can receive your customers in style.
Networking is a little easier abroad. In most major cities, many network events are organized by and for expats. Expats among themselves easily contact with each other. Most expats living abroad share the feeling of "we are against the world", and that creates a bond.
Being successful abroad with Globexs
Globexs is a service company for expats and international entrepreneurs. We provide the legal framework and the right infrastructure for your business abroad. We help you to do business successfully abroad. Our specialization is Spain. Our head office even been located in Valencia also offer relocation services in Belgium, the Netherlands and France.
Read here what Globexs can do for you abroad.