Businesses seeking impactful growth need to nail down a global expansion strategy, first and foremost. Due to the competitive nature of international expansion, and frankly business in general, companies need a strategy to succeed. Don’t fall into the common entrepreneurial trap that consists of exponential growth, panic, and sudden decline. Uncertainty is swiftly combated with a solid strategy, especially when you’re considering international expansion.
To best prepare yourself for this exciting venture, take a look at our top five global expansion strategy pointers. These tips are the beginning of a successful transition into your dream market.
1. Develop Entry & Exit Strategies for Target Countries
Many businesses tend to leap towards an opportunity that suddenly appears without a strategy. If this worked for your company in the past with local operations, that’s great! Good for you. Just understand that expanding globally is a whole other beast that should only be pursued with the help of an action plan.
Developing a global expansion strategy for entry into your target market aligns ideas and keeps the entire team on the same page. Ensure that everyone is onboard and there are no loose ends before signing off on the plan. A committed team makes your entire process run smoothly.
It’s just as important to have an exit strategy for each country. Understand the complications of pulling your business out of the market before you enter. On average, it takes three times the amount of time and money to dissolve a foreign subsidiary as it did to create one. You can avoid this timely headache by using Foreign Subsidiary as a Service (FSaaS) instead of committing to a permanent entity.
2. Proceed with an Agile Approach to Your Company’s Global Expansion Strategy
It’s a common misconception that companies need to fully commit with a foreign subsidiary when entering new markets. Or worse yet, work solely with independent contractors without a legal presence. Luckily, there are options like FSaaS and International PEO that allow companies to maintain control and compliance without the burden of operating a foreign company.
Take an agile approach to global expansion by focusing on your employees, sales, and testing the market before investing in hard assets. Smaller steps and flexibility typically lead to greater results when small to mid-size firms enter new, international markets.
3. Embrace the Culture & Customers
No global expansion strategy is complete without a section focusing on culture. A market test is one thing, but as a business leader, you should purchase a plane ticket and visit your target country. While overseas, learn about the culture from people, places, and businesses. Also, explore how your competitors operate.
“When going global it is essential to have a strong understanding of the local market and culture. This understanding should be informed by insight from a diverse group of local stakeholders and trusted advisors,” said Mike Shanley, Founder and CEO of Konektid.
In addition, learn about greetings, customs, and manners in your new country. For example, pitching a new business in the US is typically restricted to a 30 minute time frame. In the UK, business meetings can last up to 90 minutes and are a bit more relaxed.
4. Work with a Partner to Execute the Global Business Strategy
The most efficient way to successfully execute your plan and learn the culture is by teaming up with a trusted, in-country expert.
“Identify a global immigration partner that understands your goals for going global with your business. Look for much more than simply a vendor or supplier. You and your business need an experienced partner that will be an extension of your internal mobility group to successfully meet and exceed shared objectives,” said Samantha Hernandez, executive director at Pro-Link GLOBAL.
Choose a partner that has experience in your target market, if you’re not working with someone directly in-country. Ensure that you can tap into their resources to gain potential customers and employees.
5. Determine Your Company’s International Hiring Strategy
When expanding into the global market, you have multiple options for hiring new employees. These options include independent contractors, business process outsourcing (BPO), creating a foreign subsidiary, International PEO and FSaaS.
BPO is a third-party provider that manages responsibilities and opportunities for all business processes including supply chain, office administration, and manufacturing. For example, a familiar BPO is a call center that manages customer service phone calls. The trouble with BPO is you do not have significant control over the quality of your services.
If you want to hire employees to work in-house, use FSaaS or International PEO. These Employer of Record (EOR) solutions pair you with a third-party company that manages complexities of international employees in your new country on your behalf. Services include the management of payroll, benefits, withholdings, and taxes.
Your company is still responsible for day-to-day management of responsibilities and employee liabilities, but International PEO and FSaaS keep your company compliant. These agile services are perfect for companies looking to save costs while testing out a new market. Ultimately, you can reduce your risks while focusing on the execution of your global expansion strategy. Get in touch with our team to learn more about how Velocity Global can help with international operations.