The goal of any business, aside from longevity, is continuous growth. However, each market has its own limitations and keeping your business restrained domestically could be the reason why many opportunities have remained untapped over the years.
If you have been in the domestic market for many years, going global is a scary prospect. You will be entering unknown territory and will face new challenges that you have not encountered before. But on the upside, global business also brings enough benefits to the business that could far outweigh its risks.
One of the more obvious benefits is, of course, the potential for new revenue because you will be able to tap a new consumer segment in the international market. It will also strengthen your brand identity and increase your credibility since more consumers will become aware of the business.
Going global also enables the business to diversify. Since you have extended your reach to different areas, you will not be as vulnerable to local market conditions compared to when the full business is just focused on one market. This is because market conditions differ across countries, which means that your losses in one country could be offset by your profits from another country.
Aside from these, you would have a chance to access new investment opportunities that are not being offered domestically. For example, some governments would offer incentives to attract more businesses to enter their country.
Having said that, it doesn’t mean that launching a global business would be easy. You still need to make ample preparation to make sure that the business would be equipped to handle the difficulties along the way. Here are the important steps that you need to take before starting your international business:
1. Learn The Ropes
No matter how great the opportunity, it should not be taken recklessly. Before venturing into the global marketplace, make sure that you are equipped with the necessary tools and information that would enable the business to compete in an international scale.
The company may opt to onboard a consultant or work with an international trade agency that can guide them as they enter a new territory. However, it would be best if the key decision makers themselves are armed with enough knowledge and skills to handle the demands and expectations of the global marketplace. As part of your preparations for a global expansion, it would be a good idea to have them enrolled in international trade courses that offer training in critical areas of operation such as logistics, marketing, finance, and supply chain management.
2. Choose The Market Carefully
The global market is very big and quite complicated because it is composed of different countries with their distinct culture, preferences, market conditions, and customer expectations. More often that not, not all of them would be a good fit for your company or your product. Thus, you need to be selective of the market that you choose to enter in order to reduce the risks for the business.
To help you identify the right market for your business, prepare a feasibility study which would explore all the pros and cons in a specific area. This would give you a better outlook on the viability of a particular market without suffering actual losses for the company.
Once you have zoomed in on a particular direction for your overseas expansion, the next step is to prepare an international business plan. For this, you need to conduct market research in order to identify the local consumer needs, the right sales channels to tap, as well as the logistics and operational requirements to get the business started in the new market. The business plan would also include the financial estimates such as the projected sales and how much investment would be needed to achieve this.
3. Understand The Regulatory Requirements
Each country has its own regulations, and charging in without having a good understanding of what they are could result in delays or even huge losses for the company. In some cases, there would be discrepancy in the information posted on official websites of the government agencies in charge of foreign investors versus what actually happens on ground.
Thus, it is best to find a local partner who can help you process the necessary government permits to kick off your operations. Some changes may also be need on the product formulation, label, ingredient statement, packaging specifications, or other details in compliance with the local government regulations.
4. Localize Your Marketing Campaign
Due to the widespread use of the internet, most consumers nowadays are open to international products and are even looking forward to having them in their own country. However, some local customs are non-negotiable and the company’s failure to recognize these would not only result in low sales turnout, but also a potential conflict with their target customers.
This is why it is important to have a separate marketing plan prepared for each country that you are planning to enter. You need to localize your marketing message, strategy, visuals, as well as other communication materials, making sure that they are able to connect with the intended audience and get the response that you are looking for.