The ancient Greeks had two concepts of time: Chronos and Kairos. While Chronos refers to sequential time, Kairos refers to the idea of the opportune moment in time – the moment in which everything happens. The idea of “capturing” Kairos meant being able to say or do the right thing, in the right place, at the right time. When it comes to going global, companies are trying to do just that, bring their business to the right place at the most opportune time. With so much uncertainty surrounding the global marketplace, business leaders are constantly asking themselves: Is now the right time to go global?
Going Global: The Right Approach
On a large, global-economic level, there’s never a bad time to expand internationally. Going global can act as an excellent hedge against domestic, or even regional, economic and political conditions. On that level, the question is not when to expand, but how to expand successfully. As the global marketplace changes, companies need a plan to adapt their practices to fit the cultural implications present in new markets. This means exploring new ways to expand into new foreign markets.
Traditionally, when companies wanted to expand overseas, they would do so by setting up a legal entity. This approach requires companies to go through a costly and arduous process to get started. In the UK, for example, it costs companies a minimum of $2,500 and one month to get up and running, whereas companies looking to go into Brazil can expect to wait over a year and spend more than $100,000 before they can begin operations. That total does not include the ongoing costs and time required to maintain an entity. Additionally, if a company chooses to exit a market, the cost and time associated with setup can be expected to multiply by a factor of three. Companies need to consider the time and costs of expansion so they can better plan to go global successfully, efficiently, and compliantly.
Companies can utilize a more agile approach, such as an and International PEO (Professional Employer Organization) to enter global markets quickly and efficiently, without having to go through the process of setting up an entity. This lean expansion method not only cuts the cost of going global by up to 60% but also gets companies into a foreign market up to 90% faster. Furthermore, this solution takes care of compliance, risk mitigation, benefits, and payroll, and allows companies to stay flexible in order to adapt to changing business needs in foreign markets.
Going Global: The Right Place
Some of the key drivers that encourage companies to go global are to increase their market share, create a new customer base for their products or services, increase revenue, secure and retain top talent, and hedge against domestic instability. Each company has its own goals when it comes to global expansion, and identifying both the reason for expansion as well as the target country will help companies get one step closer towards those goals.
Before entering a new market, companies need to perform thorough in-country research to determine if there is a need for their product or service offering in their desired location. As they go through this process, companies can benefit from asking themselves the following questions to ascertain their potential in a new market:
- Will the product or service fill a need or desire for the new customer base?
- What cultural implications will affect the success of a product or service offering?
- Are there already competitors in the market?
- How will government regulations affect what products or services can be brought to a market?
Once a company does its due diligence to determine the potential for success in a new market, then it’s all about the timing.
Going Global: The Right Time
Although some may say it’s all in the timing, finding the right time to go global is about more than just marking a target date on the calendar. Companies need to consider every factor at play, from their approach and location to their team’s commitment, before defining the right time to go global. According to a study conducted by Harvard Business Review, the number one reason why companies fail internationally is a lack of commitment to the whole team. When going global, it is important for companies to keep their eyes on the prize and make sure they make each decision based on their long-term goals.
Timing with global expansion comes into play when companies are looking to gain a competitive advantage in foreign markets. This means ensuring speed to market in order to get in a new country quicker than their competition. When trying to get the timing right, companies can look back to their chosen global expansion approach. An agile method for entry into foreign markets allows companies to enter markets quickly and at the best possible time for their company.
There is a lot to consider when going global. From the right expansion method to the right location, companies need to take the time to create an effective strategy for their expansion. At the end of the day, if a company has put in the work and prepared themselves to overcome challenges in new countries, then the right time to undertake international expansion is now.
Take your business to the right place, at the right time, with the right approach. Learn how our International PEO solution can help you take advantage of the opportunities in new foreign markets. Reach out today!