Global expansion is every business’s dream because it is a humongous opportunity for long-term growth. Not only does it unlock new revenue streams for the business, but also extends its reach to the foreign markets as well. It comes as no surprise that players of all sizes visualize international expansion as a key element of their growth strategy.
However, global expansion is easier said than done as there are several major challenges involved in establishing a setup in altogether new location. Therefore, if you plan to explore new territories overseas, there are some things that you need to understand before doing so. Here are some of the facts to consider before taking your business on its international expansion journey.
Be a winner in your local market first
Before taking the next step and reaching out for extended global reach, you need to be well established in your local market first. Ideally, you should consider expansion, local or global, only when your market growth is high and you are already running a lucrative concern. Primarily, this is the best time because you will probably have already built a solid reputation for your brand.
Additionally, there would be a good domain experience to back you in the overseas market. These factors will help you establish a stable business abroad while coping with all the challenges that you come across. You will also in a better position to understand the market scenario and customer expectations in the new country.
Timing is the key to a successful overseas launch
Right timing is the key to massive adoption of your product or service in the target market. Obviously, there will be no scope for growth in a particular market if the product is not in demand there at a specific point in time. Furthermore, timing is of essence because entering a market when it is already saturated with competition will not do any good to your global expansion strategy.
If you do not time your international launch right, even the most innovative products and best marketing strategies will not bring desired results for your business. The best approach to choose an ideal timing for making a successful overseas launch is by evaluating the demand and market readiness at the specific time when you plan to make an entry into the target market.
Understand the business landscape in the target market
Choose the targeted market carefully by ensuring that it presents a positive landscape where your business can grow and thrive without any obstacles. Look for countries that have receptive policies and liberal compliance requirements that make establishing businesses here a lucrative and easy option.
Also, understand the prevailing tax laws, corporate laws, customs laws and export/import restrictions while deciding your target market. Countries like Singapore present huge opportunities for businesses that want to expand globally, as this article here states.
Have a tangible business plan in place
Global expansion is much more than opening a branch office in another country. Businesses enter overseas markets with different objectives and have unique challenges to overcome. For instance, an e-commerce company may want to explore a specific market to cut down taxes while a manufacturing concern may want to have a foreign facility to avail subsidies.
Based on these parameters, you need to have a well-established plan of action that covers parameters like mode of entry, degree of expansion and target timelines. Also, you need a clear plan related to procurement of finances, technology, assets and human resources.
Fund for the long run
When you plan a global expansion, you need to do it with a startup mindset as it would probably need a lot of time, money and planning before becoming profitable. There could be several hurdles and the break-even period may turn out longer than expected. So having only a seed fund as initial investment will probably not be enough.
Rather, you should have a long-term financial plan to cover all the expansion requirements without exerting pressure on your existing business. While planning the finances, consider factors like business taxes and fluctuations in exchange rates and then define a realistic budget and timeline for growth.
Ensuring that you take care of these factors while taking your business to another country can make all the difference. In fact, these factors have the potential of serving as your launch pad in a new country while missing them can hamper your plan to a significant extent. The best approach would be to have a professional business consultant to guide you and assist you in establishing your business in their country.