Stefano Maifreni, Founder & Director of Eggcelerate writes for The Executive Magazine on how to expand into global markets
Are you thinking of selling globally — and hoping to win new customers and secure big profits? If so, then you need to tread carefully. But don’t be put off.
There’s a point in the entrepreneurial journey when expanding abroad seems the right thing to do. It’s seductive, of course, with the promise of travel, glamour and the kudos of having a global empire in the making. Such a move can make perfect sense though: A new market may become your most profitable stream of revenue and turn out to be that moment when your firm ‘really took off’.
However, the risks are significant. Over-reaching and over-spending can be enough to topple an otherwise-stable business. Unknown local market dynamics and factors could trip you up. And then there are those logistical and language hurdles.
That said, if you follow these five steps, you’ll be on safer ground.
Step #1: Choose your market
It’s easy to say ‘abroad’, but which country first? Research what the local competition is offering and the level of demand from customers. Also, use industry events and networking contacts to get insights from people who work in that country. Then consider what the culture and language gap may mean for you: Do you need English to be spoken? Do you have issues with time-zone or proximity? For example, is Brazil more suitable than the US, or South Africa better than Germany?
Step #2: Fine-tune your proposition
Focus on just a few verticals — and adjust your product or service offerings to fit the local market, based on your research. Avoid the ‘currency conversion trap’, where you simply convert your price into the local currency. Instead, set your price according to the local supply/demand and to reflect your real costs and need for a reasonable margin. Then present your proposition to a local audience and gather their feedback. Afterwards, tweak your offering again.
Step #3: Structure your go-to-market strategy
Invest carefully. Use a virtual office, virtual contacts and a white-labelled salesforce to get up and running quickly. That way, you can exit in a relatively pain-free way if things don’t work out. However, target significant resources on exhibiting at local trade fairs, hiring native-level speakers, enriching your contact list and using outbound calling services and agents. This stage is critical, as you’ll need also to structure your lead-to-cash process to cater for international clients.
Step #4: Be bold and go for the big fish
Even though you’ll be seen as a ‘challenger brand’ in the new market, some big clients will be fed up with the market leaders and may be willing to give you a hearing. Punch above your weight and push hard to win their accounts. Their business may give you a cushion to support your future growth in that country, plus some flagship deals you can reference when reaching out to other potential clients.
Step #5: Strengthen your position
When regular revenue starts to arrive, it’s time build up your local operation and move into the business-as-usual phase. At this point it’ll be more cost-effective to take your own office, employ people and train them. You can then look beyond your initial verticals and also start to target numerous smaller customers. Then, when your local business is ticking over nicely, it’ll be time to consider your next move … and your next country.
Ready for the rollercoaster?
Business expansion abroad can be packed with thrills and dangers, so plan carefully and be willing to adjust your strategy on the fly as new challenges and opportunities arise.
When facing decisions, choose the options that will keep you flexible and protect your cash-flow. Also, work with trusted advisors who understand the landscape ahead of you. They’ll know how to support you when things get tricky and keep your feet on the ground when your new venture abroad starts to take off.