Are you ready for your expansion abroad?
There a many possibilities to expand abroad. But are you ready?
Determining whether your company is ready to start expanding abroad is crucial. According to one of the studies from the International Marketing Review 90% of the companies aren’t prepared enough. The outcome: disappointing results or even withdrawal from the foreign country. And considering that starting up business abroad will cost between US$ 100,000 — US$ 400,000… That’s a lot of money wasted…
When I am advising companies for their next step abroad, I follow this comprehensive checklist to do a first check whether they are ready or not.
1. Study the market
Although you can be very successful in your homecountry, there is nog guarantee that you will be successful in the new foreign country.
So Is there a demand for your products at the price you allow for you to get a profit margin? Who are the competitors and how will they react? What are the habits?
2. Implement an export strategy and review your capabilities
Strategy, strategy, strategy… It’s all about having & executing the right strategy.
Do you have a export strategy in place? And what would you gain and lose in your business if you start abroad. Most of the business owners underestimate the impact on R&D, finance and capacity.
3. Develop an export plan
It’s the old adage: If you fail to plan…You plan to fail…
Define how to enter the foreign market, develop a marketing strategy, investigate the extra capacity and allocate an adequate budget to cover the costs of kick starting the export.
4. Choose your trading strategy to enter the country
According a Global SME Benchmark Study we conducted this year, most companies don’t know how to find the right sales agent, distributor, license partner and what they bring to the table.
Decide if you need to sell directly, need a sales agent, distributor or license partner at an very early stage and hire a business development specialist with a network in the new country to check on sales agents, etc. Embassies are also a good source for information and potential business partners.
5. Promoting your product
How are you going to sell and advertise your product?
Check what competitors do, what’s common and adjust your marketing strategy to the target market. A successful campaign in your home country doesn’t mean that this will be successful abroad. Cultural differences, models, every detail matters to build up a relation with your potential customers.
6. Know your legal obligations and requirements for export
Protecting your brand and IP, having the right agreements in place. It all matters when you start your business abroad.
You must know what the costs will be in terms of legal and import requirement to market your product in international market.
7. Ensure compliance with payment deadlines
Starting up a business in a new country requires sufficient funding. Even if you have a business opportunity and it seems that there is no “out of the pocket” money involved, it will cost at least $ 25,000 to start. And after 18–24 months it shouldn’t surprise you that the funding needed hits the $ 100,000 level.
Make sure your cash flow is kept at a safe level. Generate enough funding capital for future operations. And check you insurances if necessary to safeguard your business in the new market.
8. Choose your distribution channels carefully
Having a business opportunity to sell in a new country is great. But what about the future? What would you like to set up abroad? And for which period?
Check the implications of selling over long distance and outside your borders.
9. Transports goods efficiently
Perishable and non-perishable goods. Packing, labelling, etc. What are the requirements?
Choose the most appropriate means of transport and check that the goods have been insured by you or by the importer.
10. Follow-up after the sale
Customer loyalty is key. Have a program in place to nurture the early adaptors and make them ambassadors.
Besides keeping up with customers, build a strong relationship with the exporting agents, banks, etc. And monitor for possible political unrest or other adverse situations that may arise. Properly manage after-sales service.
