Starting a business is a challenging undertaking, but once you manage to find your feet and make it run like clockwork, it’s time to think about expanding to new markets and possibly scaling your business globally.
There’s no need to limit yourself to your small corner of the world when you can find a gamut of new opportunities that lie beyond the borders of your home country.
Nowadays, new technologies allow you to do this without having to actually relocate to another region and being physically present or having a brick-and-mortar store there—you can do everything online.
But scaling your business globally and conquering international markets isn’t the same as attempting to grow domestically.
Here are a couple of considerations and lessons to keep in mind before you decide to spread across the globe.
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Pick the Right Market
Nowadays when growing a business in a familiar landscape can be risky, it’s only logical that competing in the international arena is treading uncharted waters.
That’s why you need to conduct thorough research of your potential markets and weigh your options.
There’s a number of make-it-or-break-it factors that you need to bear in mind before you make your decision, and some of the questions that you need to ask yourself are:
- Is the product or service the right fit for the targeted culture? Let’s have a look at a well-publicized Tesco’s multicultural blunder from a couple of years ago. Namely, in order to honour Ramadan and offer those who observe it a tasty snack after an entire day of fasting, a Tesco store promoted smokey bacon-flavoured Pringles even though it’s a matter of common knowledge that Muslims don’t eat pork. And this faux pas is just a tip of the iceberg, as there are many other, more subtle cultural nuances that you need to research and understand before you offer your product to an international audience.
- Is your target audience familiar with the product? If that’s not the case, then be prepared to invest a substantial amount of time and money into educating people on how to use and make the most of it. Besides, you’ll have to promote your product heavily in order to distinguish yourself from the competition. On the other hand, if you want to offer a new, trailblazing concept that doesn’t exist in that market, then you have a chance of making your company name synonymous with the product.
- Is the infrastructure developed? Make sure to establish whether the roads are good and well-connected, as well as whether you can deliver your goods on time. Is the country safe and what kind of legal protection can you expect? All these factors play a crucial role as to whether it’s wise for you to invest in a particular country or not.
- Is there a demand for your product or service?
- Who are your competitors?
- What’s the market size and saturation?
While finding answers to all these questions, you’ll get a clear idea about whether expanding to a particular foreign market is worth a try.
Localize Your Approach
One of the most important things, when you want to make it globally, is understanding cultural and linguistic barriers and overcoming them.
Even though many people around the world speak English, you can’t expect to use it in your marketing and customer support in the markets where it’s not a native language.
Namely, people don’t feel comfortable when they can’t use their mother tongue while interacting with brands, particularly when they’re making a purchase or trying to troubleshoot an issue.
That’s why it’s essential to localize your marketing and offer your target audience a website, content, and customer support in their native language.
Besides that, it’s worth mentioning that Google occupies 68.75% of the global search engine share, which means that it’s not exactly the most popular search engine in every part of the world.
In China, for example, Google is blocked, and the only way to reach your Chinese audience would be via Baidu – a search engine giant used for almost 65% of the searches in the Land of the Red Dragon.
Wondering How to Reach Chinese Users?
Read our guide 8+ Tips For Marketing Your App In China.
Similarly, Facebook also has its Chinese counterpart—WeChat, while there are numerous other IM apps and social media networks in this country that you can use to reach out to your target audiences.
In other words, you’ll also need to research keywords popular in the countries you want to expand your business to, which means that you’ll have to create your SEO strategy from scratch.
Understand Financial Management
A great number of businesses, 82% to be more precise, fold due to poor cash flow management. This dramatic stat shows how important it is to have at least some basic financial literacy if you’re going to take the entrepreneurial path.
But, things get even more complicated if you throw international transactions into the equation – different currencies, taxes, and other complexities that can lead to numerous legal and financial issues.
So, it’s a good idea to learn the ropes of international financial management and acquaint yourself with some common trade finance instruments, if you want to avoid the pitfalls of doing business in a foreign market.
However, this is just scratching the surface, and as an entrepreneur you don’t have enough time to figure out the nitty-gritty of every financial system of every region you want to do business in, which is why hiring a well-versed accountant specializing in international transactions is a must.
Speaking of money matters, it should be mentioned that allowing your target audience to pay for your products or services in their own local currency is another great way to encourage them to purchase from you. Just like people feel more at ease when they can use their native language in communication with brands, they also prefer when prices are expressed in their local currency.
So offer multi-currency support as well as different payment methods if you want to reduce your shopping cart abandonment rates and increase your profit.
Scaling a Business Globally
These are some of the lessons that every business owner will find useful when scaling a business globally:
- Choose the right international market
- Localize your approach for each target market
- Understand financial management in international situations
The business that is able to effectively follow these tips can have greater chance at success when transitioning from being merely a local company to becoming a global company.
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Michael Deane has been working in marketing for almost a decade and has worked with a huge range of clients, which has made him knowledgeable on many different subjects. He has recently rediscovered a passion for writing and hopes to make it a daily habit. You can read more of Michael’s work at Qeedle.