Businesses expanding internationally is becoming the requirement to stay competitive in a rising number of markets. If you’re new to the idea of international expansion and need to learn the ins and outs of how to dive into a new market, you’re not alone. Global growth, while common, is a new territory for many businesses. Luckily, there are many informative tales of trials and tribulations. In this post, we’ll walk through the basics to help guide you in the right direction and get a head start on your international strategy.
Adopt the Startup Methodology for Expanding Internationally
Businesses expanding internationally will greatly benefit from adopting the lean startup methodology. By creating more value for your customers with fewer resources, you will be less likely to get in over your head and more liable to succeed in your new market.
On a similar token, companies should also practice agile methodology during international expansion. There will probably be road bumps, and the more flexible your firm, the better equipped you are to handle change.
Agile is the perfect practice for these changes as it allows teams to cope with the ever-changing needs of the market. Work is performed in weekly sprints where one project is focused on at a time. Teams do not move on until the work is complete. This methodology is proven to increase productivity and quality.
Tools for Lean International Expansion
Companies expanding into a new market should avoid diving in headfirst, i.e. establishing a costly foreign subsidiary. Before making a huge commitment to your new country, test the market through a lean service such as International PEO or Foreign Subsidiary as a Service (FSaaS).
You should not have to invest months and hundreds of thousands of dollars to test your business model in a target market. The two, modern services listed above allow you to send a representative into your new country and sell your products or services quickly and easily.
You’ll also be compliant without the hefty responsibilities associated with a foreign subsidiary. If you find that your business model works in your new market, International PEO and FSaaS can serve the needs in-country for the entirety of the business life cycle, so you’ll be all set to expand operations.
Businesses Expanding Internationally Need a Solid Strategy
This may seem discernable but a solid international strategy is one of, if not the, most important piece to your global expansion puzzle. We’ve seen many companies fail if they do not have a strategy in place for their new venture. Simply having an idea to expand overseas is not going to cut it. Without a plan, your company may need to exit your selected market either before you’ve had a chance to see their opportunities come to fruition or after they’ve wasted enormous amounts of money for essentially learning on the fly.
First things first, adopt the agile approach. We went into detail with this above because it’s truly the key to your global success. By taking smaller, faster steps to prove your company’s model works before making a new investment minimizes resource commitments and maximizes your return on asset rate in a shorter timeframe. In turn, you’re also practicing the lean startup methodology. It’s all coming full circle.
Other international strategy tips include:
- Minimize investments in costly overhead. Only commit to capital purchases if absolutely necessary.
- Do invest in high-quality talent. Your employees are your life support and the face of your firm in the new market. Invest in training, benefits, and take advantage of local nationals’ books of contacts to gain market share.
- Look into unique financial options. There is money available for small businesses expanding internationally in the way of grants and VC. Don’t leave money on the table.
Before investing in international growth, review your international strategy and business plan with an expert that has experience in your target market. Our team works in more than 185 countries and we’d love to discuss your options for growth. Get in touch with one of our international consultants to learn about all of your options!