Companies facing times of stagnant results tend to see increased value during international growth. In fact, businesses that expand overseas experience nearly 10% more revenue growth per year than their counterparts that stay in a singular market.
Taking your company into a new country diversifies your revenue stream and leads to higher potential net profits. In a survey of international business growth, one out of five companies that moved into global markets experienced enough growth to offset negative returns experienced in their US operations.
If you’re ready to benefit from international growth, take advantage of our six tips for executing a successful global strategy.
1. Find a Partner Who Understands Laws & Regulations in the New Country
Nearly 83% SMEs (small to midsize enterprises) in the US put overseas expansion on the top of their priority list. One of the primary challenges for these businesses is legal issues. As you enter new markets, regulations, labor laws, and tax requirements vary. It’s very hard to keep track of everything.
We suggest teaming up with a local expert who has experience navigating the local law to ensure your company remains compliant and transitions smoothly into your new market.
To learn more about international business strategies for SMEs, check out this post.
2. Prepare for the Full-Impact of Globalization
Going global is a big task that requires plenty of thought and preparation. Before committing to a new country, have plenty of internal meetings to ensure you have proper buy-in from all stakeholders including your executive team and board, if applicable.
Consider using strategic tools such as a gap and SWOT analysis to objectively judge if entering the new market is cost-effective and beneficial for your bottom line.
3. Know Your International Customers
Netflix is a household name in the US and international markets. In 2010, the streaming video service took its platform into Canada. The next year, it moved into Latin America. In 2012, Netflix moved across the pond to various parts of Europe.
According to the Organization for Economic Co-operation and Development (OECD), the expansion into these countries represents an estimated 63 million broadband households. Netflix’s move to international markets nearly doubled its business.
The company had successful results because of strategic thinking, especially surrounding its international customers. Netflix offers a unique service in that it needs to adapt to language and preferences in different markets. The company can offer similar programming in the US, Canada, Latin America and Europe, so these markets were a smart move. While it did add some special content for its new regions, it didn’t need to accommodate too heavily.
Netflix didn’t enter Asia as quickly because of its heavy Internet regulations and vastly different culture than that of the West. Smart business decisions regarding both legal and customer considerations brought great international growth results to Netflix.
4. Be Comfortable with the New Culture
Any country, even Canada, is going to be different than the US. Small nuances can result in large changes in your business, and you need to be prepared before you enter the market.
Culture isn’t just the customs and traditions ingrained in the country; it’s also the way people do business.
New Relic, a software company, based in Silicon Valley chose Dublin, Ireland as its first international growth location. It was a great fit given its parallel business practices and young, educated workforce. They also easily adapted to the affordable real estate and labor in the European region.
5. Prepare a Solid Marketing Plan to Support International Growth
Globalization is a natural part of many businesses’ growth strategies. Once you get all the pieces in place and are ready to enter a new market, be sure to support your move with a great marketing plan. Let your consumers and other businesses know that you’re growing overseas.
Marketing efforts helped popular travel site Airbnb grow its worldwide awareness. When the company expanded its offerings internationally, it launched a correlated social media campaign centered around the hashtag #OneLessStranger.
According to HubSpot, Airbnb referred to the campaign as a “global, social experiment.” It urged communities to perform random acts of hospitality for strangers, and then take a video or photo with the person and share it using the hashtag.
It was highly successful and increased the company’s global reach.
6. Be Flexible & Take Your Time
International growth isn’t a rat race. It’s a strategic business move that helps increase revenue. Growth at too rapid of a rate can lead to failure, and none of us want to fail.
First, understand that you do not need to commit to your target country through a foreign subsidiary fully. Also, you shouldn’t rely on the work of independent contractors to carry out international responsibilities. Instead, you can expand into new markets with a service like International PEO. This employer of record (EOR) service allows companies to maintain control and compliance overseas without the burden of operating a foreign company.
An agile approach to international growth helps you focus on your employees, sales, and testing the market before investing in hard assets.
Also, take it one country at a time. Dive into markets in which you feel confident. You can also test the market through an agile service, like International PEO and Foreign Subsidiary as a Service (FSaaS). Contact us to learn more!