Expanding your business to become an international concern is a huge step, one that can go dramatically wrong if not handled correctly. It is important to plan correctly for an international expansion, but it is just as important to create and develop good relationships with the foreign business peoplewho are going to be helping your company become a success.
You may feel that going global is a big step for you to take, perhaps too big if you are a start-up company, but if you feel that your products have the potential to make big sales in foreign climes, then the risk may be worth it. To ensure this is the case, you should conduct market research in the regions you want to expand to, making sure your potential customers do indeed exist and that they are ready to purchase your goods. Whilst you can do this remotely, there really is no substitute for visiting the regions and seeing for yourself whether there is a market for your business. Travelling to such places will also enable you to experience a little of the local culture and the customs of the people you will be selling to. This is particularly important if your intended region has a culture that is significantly different from your own.
You really need to get to know the people you will be working with. The best way to do this is not to talk about business at first, but to get to know them on a more personal level before starting the business chat. Show respect for your soon-to-be associate by taking on their customs, even by learning a little of their language if possible, and do not put limits on your meeting times, but allow them to last as long as you both have something to say.
You may be wondering which parts of the world are suitable locations for your business expansion. Obvious choices include those areas that have the same culture as your own, as you can pretty much guarantee that they will have the same needs and desires as your current customers, but if you do not look beyond these areas, you may be missing out on some major opportunities. Take the Middle East as an example. Entrepreneurs, such as Fahad Al Rajaan, who is the chairman and managing director of Kuwait Real Estate Investment Consortium, but is Western-educated, have understood that there is a huge increase in the number of people, from all levels of society, who are settling in these areas, all of whom have money to spend on the things they want.
You will also need to research into the trade barriers that exist and the logistics of either exporting your manufactured goods to the region or having them produced in the region. If you are planning to produce them in the region, then you will need to know your manufacturing partners and be assured that they can produce your goods to your standard and in good time. Alternatively, the reason you may be looking at foreign regions is because you understand that you can have your goods manufactured more economically than at home, in which case you should research the region with an eye to logistics. For example, are the roads good to transport your products ready to be exported? Is there suitable accommodation nearby for those times when you need to pay a visit to the factory?
You may be in the enviable position of being invited to expand your business in more than one region, but you should think about this carefully before accepting each one. Expanding to an area of which you know very little can be a big mistake, because it is unlikely you will understand your target market adequately or appreciate all the issues surrounding trading with business partners.
One area that you may not have considered when thinking about expanding abroad is to ask whether the home governments offer any incentives to foreign businesses, especially start-ups. You may be able to get a grant from a government that wants to increase import and export opportunities, and generate job creation for their citizens.
Expanding abroad can be an exciting time, but it can also be littered with pitfalls if you fail to plan your expansion strategy andfail to research. Ensure that your business has the best chance of success by getting to know the people and the country you want to expand into.