Having relatively easy access to the global audience is a terrible temptation. Many companies try to expand before they are ready or expand too quickly. However, there is simply too much business outside of the local area to ignore. Here are some tips to safely expand beyond your local reach, using technology and your competitive advantages to maintain your ROI.
Studying the Target Cultures
Whether you are expanding into new areas around your country or moving internationally, there are differences in culture that you must address. You may need to tweak your marketing campaign to coincide with these cultural differences, which may turn into a segmentation of your outreach channels as well. For instance, Facebook is a viable B2B channel in Eastern Europe, but not so much in South America.
Complying With New Regulations
Before you can legally do business in a new area, you must be sure that you are in compliance with local regulations. In most cases, you will need to expand your partnerships with legal and financial counsel outside of your local area as your business expands. Ask your current professional partners if they have leads on competent advisors in your new business locale.
Stepping Back in the Sales Process
The financial backing for your expansion likely comes from a financial surplus that you have achieved in your local area. Most likely, you have been able to take advantage of word-of-mouth marketing and a loyal consumer base to reduce your marketing costs. Everyone already knows about you, tells a friend, and once they try you, they stick around. This will not be the case in new jurisdictions. You will need to budget for customer acquisition efforts again. Do this now so that you are not surprised in the middle of a campaign.
Budgeting for New Logistics
Currency fluctuations, transportation costs, import/export duties – these are just a few of the new expenses that you will be taking on. It is usually best to invest in a software package that can estimate these costs for you and factor them in to new shipments. You may need to reset your pricing based on these new fixed costs and you need to know exactly what they are.
Determining a Business Structure
In many cases, simply setting up your business properly in new jurisdictions can save you a great deal of money. You may also have to share ownership of a foreign-owned subsidiary with a local agent. Look into the best way to represent yourself to your new locations, whether that is through a representative, a direct branding effort, or working through a larger distributor and simply providing a product.
Looking for Financing
Depending on your country of origin, you may be able to connect with government resources to defray some of the costs of expansion. For instance, the Export-Import Bank of the United States is a great resource for companies that are looking to do business overseas. The Ex-Im bank has helped American companies to the tune of $300 billion since 1934 with capital loans for exporters and even supplying loans for foreign purchasers of American goods and services.
Using Technology to Expand
TradeNet is an invaluable resource for companies that are looking to expand outside of the United States. You can find databases, personal anecdotes from experienced international sellers, and hard contacts from companies and buyers who are looking to partner with you.
