Market opportunities for your new venture are now immediately global, thanks to the pervasive access to the Internet and social media communication. However, this doesn’t mean you can treat the world as one big homogeneous market, ignoring the vastly different cultural, economic, and political realities. Scaling worldwide is like hyperlocal on steroids.
Learn From Others’ Mistakes
Many businesses, large and small, have stumbled in this area. For example, Starbucks’ first efforts to expand to Israel and the Middle East failed miserably due to a vastly different “coffee culture,” which they could not adequately accommodate. Even the venerable McDonald’s could not recognize that, in Bolivia, their price per meal was off the charts compared to indigenous alternatives.
As an advisor to small businesses and startups, I have put together a list of strategic recommendations that will give you a solid roadmap and keep you on track as you expand your business beyond your local environment and country:
Don’t let experience in local markets drive global assumptions
Global expansion is never merely a multiplier applied to local results. Do your homework in each new market and validate it with a controlled experiment before spending big money on a rollout. Due to a lack of available data, foreign markets may require feet on the ground.
Check historical data for economic and political stability
Many international markets have a history of sudden or cyclic changes that could dramatically increase your risk or cut your opportunity. Prepare backup plans to minimize risk if you find the possibility of sudden change or your target market has shown an inability to deal with economic shocks.
Evaluate local transportation, energy, and financial services
These factors can change your customer value proposition or your cost of doing business in that region. To accommodate local issues, you may need to adjust your business model. For example, you could eliminate free shipping or add a customized customer support contract.
Factor in currency exchange costs and variability
Smart business owners have learned to lock in exchange rates, manage accounts receivables carefully, and engage local financial organizations who know how to handle transactions in this environment. Currency exchange considerations are especially critical in local contract negotiations.
Accommodate the local cultural traditions and ethics
The local culture affects the decisions a business owner must make and how the customers view your business. Failure to accommodate these will cost you money and could leave you red-faced. I recommend hiring people in each local market to manage your business.
Investigate local alliances and partnerships
One of the most effective ways to expand your business and grow in unfamiliar markets is to join forces with another company of a similar size and market presence in a territory you would like to enter. Don’t forget to evaluate your competitors for “coopetition” alternatives that benefit both.
Be proactive by building rollout strategies with local experts
The last thing you need in a new market is to deal with early mistakes and trying to repair a tarnished reputation. Strict local barriers and labor laws have hurt Uber and Airbnb, leaving lasting consequences. While overseas counsel can be expensive, it is worth the investment to help your business avoid costly penalties. Consider finding reputable PEOs for each region of interest; for example, here are Canadian PEOs with high reputations.
Enjoy the challenges and learning opportunities
International expansion is often seen as one of the best learning experiences for business owners and an enjoyable travel opportunity for you and your family. Remember, prioritizing your well-being also means ensuring smooth and enjoyable trips through reliable corporate travel services, making the journey both satisfying and fun.
Bonus: Leverage technology
To streamline your international operations and ensure smooth global transitions, consider investing in reliable global mobility software that can efficiently manage employee relocations, visas, and compliance requirements, allowing you to focus on the rewarding aspects of your expanding business.
Don’t look for any magic formulas to expand your business globally. The challenges are continually evolving and are, at their root, a product of social interaction, economic evolution, and political dynamics. It will always take smart business owners, armed with the latest knowledge, proper homework, and modern analytic tools, to minimize the risks and maximize opportunities.
Tapping into global markets, especially the large and under-developed ones, promises market growth beyond your most optimistic vision and empowers people worldwide to share in a better economic future.
It’s time to make the global opportunity part of your business plan today.