If you’re a small to midsize firm that is performing well in the States, it may be time to join the companies going international. Diving into new markets is a great way to refresh a tired product, explore potential with a new customer base, and gain a competitive advantage. If globalization is in your business’ future, here are eight tips that can help you with your expansion.
Keep an Eye on Market Trends
The world of business is changing every day. Whether it’s adapting to technology or dealing with a new competitor, companies must stay on their toes to succeed in the marketplace. Trends come and go, but some of them stick. For example, if your business produces bread, you’ve dealt with the gluten-free trend. Although many wellness experts thought this was a fad, it’s actually sticking and continues to grow.
Trends also affect globalization. Certain markets gain hot streaks and attract many new businesses. Your goal as a business is to spot the emerging locations and plan a market test to see if your product or service works in that area.
For example, Air Canada expanded its services into new countries with routes to Shanghai, Taipei, and Mumbai. The airline noted these emerging markets and jumped on the opportunity to service them. As a result, revenue increased and customers have more options for international flights.
If you can beat the rush, you may be able to position yourself as an industry leader and capture a larger percentage of the market share.
Companies Going International Must Fully Commit
This tip is pretty self-explanatory. If your entire team isn’t onboard with the company’s international expansion, you’re starting off in a bad position. Global growth requires 100% commitment from everyone; from executives to mid-level managers to entry-level employees. Teams need to be flexible and open to change to successfully startup operations overseas.
Use an Agile Solution
A solution like Foreign Subsidiary as a Service (FSaaS) helps companies obtain a legal presence in their target market quickly and affordably. An agile solution allows firms to start operations in a new country and hire employees without the burden of establishing a subsidiary. Benefits of an agile solution like FSaaS include:
- Assistance with hiring international employees.
- Guidance through country-specific regulations like monthly withholdings, taxes, social insurances, and employment regulations.
- Timely and accurate administration of payroll, expenses, commissions, allowances and local benefits.
- Employee termination assistance.
Don’t Fail if Avoidable
There are necessary aspects of globalization that require extra work from companies that fall outside the realm of day-to-day business. One prominent example is the language barrier. Popular streaming video company, Netflix, struggled during its international growth because it didn’t adapt to the language barrier. A majority of Netflix’s content is broadcasted in English. In countries like Russia where only 5% of the country speaks English, the content becomes irrelevant. Don’t fall into this trap. Do your due diligence proactively avoid potential problems.
Know your Market
FSaaS also comes in handy if you want to perform a market test before fully committing to a location. Exploring your target country in-person is an imperative step to making sure your business works. You’re working with an entirely new set of customers, customs, and traditions. The only way to know if your business will succeed is to test it out.
Going back to Netflix, when moving into new markets, it decided to keep its price point the same, even in developing markets. As a result, the streaming video company is more expensive compared to its competitors in those countries and may lose some market share.
You’ll find that some countries place restrictions on the ratio local employees to expats for international companies. Requirements aside, hiring local employees benefits global companies. These team members know the market inside and out. They can help you reach new customers and teach your domestic team about local customs.
Don’t Reinvent the Wheel
Companies going international is not a new fad; it’s a common step for businesses seeking new growth potential. With that being said, don’t try to reinvent the wheel and find global growth alone. Confide in experts to guide you on the right path to make your experience more enjoyable and simple.
Develop a relationship with a trusted, local partner. Find a professional that has an extensive in-country network that you can tap into for new customers. Partners can also help you test the market. Once you’ve developed a relationship, consider using your partner to put out feelers for your products and services to see if consumers latch on.
Please feel free to reach out to us if you have any questions about expanding internationally. We are always happy to connect. If you are looking to expand globally, consider our solution, (FSaaS), which reduces time to hire, reduces risk, and reduces long-term commitments.