By Roger Pierce, Small Business Expert
Thinking of bringing your business to the world?
Growing your business into new markets is rarely an easy task. While every international expansion faces unique challenges, there are a few common mistakes companies often make when going global. Do your best to avoid these potentially costly errors.
Lack of research
The useful piece of carpentry advice “Measure twice, cut once” also applies to expanding your business into international markets. Your degree of success in a new country is largely determined before you even begin operating there. The importance of thorough research cannot be understated, as it will let you know what you’re up against and what you need to do to be successful in an unfamiliar business climate. Make sure your preparation includes conducting market research, getting to know specific cultural values and identifying key players in the region – such as competitors and suppliers.
Export Development Canada (EDC) is an excellent resource for businesses interested in expanding into other country markets. For example, the site offers some market research information on countries that might be part of your international expansion plans.
Essential areas of research also include local laws and how your company will fit into the current market landscape. You will also want to understand the ins and outs of international exporting.
Neglecting your domestic business
Take care that your foreign operations don’t interfere with your domestic business. Establishing company outposts in other countries can be a strain on resources. While you want to give your international efforts the best chance to succeed, make sure you aren’t doing so at the expense of your home market. If the Canadian portion of your business begins to slow, it may be because you’re not dedicating the time or resources it needs to keep it thriving.
To free you up to pursue international opportunities, you may want to install a management layer to run your domestic operations. Or, alternately, hire a manager to oversee your foreign expansion while you remain focused on business at home. Taking a realistic assessment of your management bandwidth is an important part of the process to going global: you certainly want to avoid taking on too much and negatively impacting the existing business you’ve worked so hard to build.
Going it alone
One of the biggest mistakes companies make is failing to get help when they expand internationally. Teaming up with key local players will allow you to benefit from their knowledge and more easily adapt to the new setting.
You can also turn to larger companies with international experience to provide you with essential business services. Relying on a company like FedEx for your international shipping needs can help alleviate stress and leave you free to concentrate on establishing your footing in a new marketplace.
You may accelerate your entry into a new market by working with qualified advisors. Tap into resources available from the government as well as your own professional network of accountants, lawyers and bankers. Best of all, check your business network to find colleagues who have successfully entered foreign markets and are willing to share some advice with you.
Be sure to plan out your international growth well in advance. That way you can give yourself enough time to do due diligence and ensure you have the resources in place to successfully expand your business into different markets. For example, you’ll likely need access to additional credit, some corporate re-structuring to establish a trade subsidiary, and some team training on any new international systems or procedures. Establish a reasonable timeline so as to avoid the mistakes rushing in can create.