Want to grow your business internationally? Take these four steps first.
By: Steve Louis
Let's say you successfully achieved optimal market share in your home country last year, congrats! But as a result that means that this year sales growth has flatlined through the first quarter. How can you maintain that steep revenue curve that your board and shareholders have come to expect?
The answer may include expanding into a new market. But unfortunately what got you here may not be what gets you there. However there is a strategy that allows you to test the waters starting in as little as 80 days.
First, ask yourself the following questions before jumping in with both feet.
1. Customer Matching
Are the customer needs abroad the same as they are here? Consider the cultural as well as economic differences because being in tune with your customer’s values is a key factor in making a sale. Additionally the way in which people in other countries buy products or services may be distinctly different from one place to another. They may require additional information, care more or less about warranties or aesthetics, need to look a person in the eye rather an online exchange, or expect to haggle on price.
2. Market Analysis
How is the market different in the new country? Think about how their regulations, competitors, pricing, access to information, promotions may differ from what you are used to. Are you expected to maintain local presence? Chances are there are high barriers to entry to consider particularly if there is an incumbent.
3. Internal Assessment
How well prepared is your firm for this journey? Have you identified the proper sales channels, the right people to parachute into the new region, assessed how much it will cost just to get set up? There are a number of new challenges that a market expansion brings – currency risk, insurance costs, permits / licenses / registrations, establishing a new entity, transporting products overseas… so be as objective as possible when analyzing your readiness status.
4. Partnership Strategy
The good news is that you do not need to do this alone. Find a trusted partner in the form of an alliance or joint venture with a firm who has ‘boots on the ground’ in that new market to help you navigate the common pitfalls and protect you from bad agents. This ‘soft landing’ will help you minimize risk exposure and unnecessary expenses while still being able to assess the obtainable market opportunity.
Expanding into a new market can be the next frontier for growing your business if performed strategically. By understanding the customers and market, recognizing which of your firm’s capabilities translates well overseas, and having a partner to help plan and execute your growth strategy can unlock several opportunities for taking your business to the next level.
About the Author
Steve Louis is a Managing Director at Eternal Energy LLC based in Houston Texas. Eternal Energy is a business advisory firm which specializes in helping clients expand into new markets, with offices in both the US and Dubai. He can be reached at firstname.lastname@example.org or by visiting www.eternal-nrg.com.