You don’t know how to expand your business internationally? It is not an easy task. In fact, there are companies that specialize in managing subsidiaries in foreign countries in order to raise the probabilities of the success of complex operations like these.
Studies have proved the efficiency these companies achieve. There’s data that should be considered twice before thinking of embarking on this adventure alone. However, we share our 9 keys to increase the possibilities of success when expanding a business internationally.
1 Analyze the country’s technical aspects
Before making your business go global, clearly, the first thing you have to take into account is the country’s technical aspects. And when we say technical aspects, we refer to:
– The country’s security (most important KPI). Both politically and judicially.
– The taxation system. The fiscal treatment of foreign companies as well as the type of business employed. It is very important to make the right choices in order to avoid problems with the previous aspect.
– The country’s economy in relation to growth and stability, free market treaties, etc. For example, the case of Catalonia’s independence does not bring about security issues but it does affect its economic stability).
– Bureaucracy. It deserves to be considered a separate aspect given its ability to make a project fail by its own, without exaggeration. Even more so when you have open projects and have deadlines to meet.
“Before making your business go global, clearly, the first thing you have to take into account is the country’s technical aspects.”
2 Analyze the country’s idiosyncrasies
When we talk about internationalization, the term “nation” is included in the word with all the aspects that it carries along. Each nation has peculiarities that we must know to prevent complicated situations. Or the other way round, we could take advantage of these factors to benefit from them as we settle in the country quicker and more easily.
Analyze the country’s idiosyncrasies in order
to prevent or benefit from complicated situations
3- Can a Joint-Venture be the solution?
In relation to the previous aspect, more often than not, creating a Joint-Venture with a local company can facilitate things. It is a matter of analyzing the possibilities and measuring the ROI of doing it one way or the other. Not being able to adapt quickly and effectively to the new country can cost you a lot of money, so an alliance with a local company can help you save time and money.
A first step could be to look for commercial agents or local representatives that may be able to help you have the first contact with the local market.
Look for allies to increase the possibilities for
success. You have multiple options. Analyze
them and choose the most convenient one.
4- Look for organizations and institutions from your country of origin
There has to be organizations and institutions from your country wherever you want to settle, and they may help your people throughout the process. Some of these organizations may offer advice and inputs about the basic aspects when it comes to starting operations in the country (some may charge a fee for these services). Chambers of commerce and the Consulate can be good allies as well, ask around.
“Some of these organizations may offer advice and inputs about the basic aspects when it comes to starting operations in the country. Some may charge a fee for these services.”
5- First of all, carry out explorations
The organizations to which we referred in the section 4 usually hold talks, events and even offer trips to the countries in which you may want to expand. Take advantage of the resources they offer to feel your way, foresee and eventually try to minimize risk and maximize chances for success.
6- Adapt to local tastes
When in Rome, do as the Romans. All your knowledge about how to do things in your country will lose importance here. It is equally important to learn as it is to forget. As Darwin put it, “it is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” We can provide a long list of companies that can be taken as examples when it comes to international expansion where they had adapted their products to the local markets since otherwise they would not have worked 100%.
Example of adaptability to local taste. Literally.
Adaptability is very important, but hold on to your essence and you’re the values of your company. Think global, act local.
7- Define your objectives using the SMART criteria
Expanding a business internationally can lead to success or failure. What is most important is to know, as soon as possible, if we are directing towards one or the other in order to act accordingly. Our objectives have to be framed within the new country, all aspects considered. They have to be specific, measurable, assignable, realistic and time-related (SMART). I insist, within the frame of the new country, which can lead to very different objectives than the ones you set at home.
“Expanding a business internationally can lead to either success or failure. What is most important is to know, as soon as possible, if we are directing towards one or the other.”
8- Do not expect short-term results
When it comes to expanding your business globally, do not expect short-term results, even more so if you’re doing it alone. There is always a learning curve, but in this particular case said curve is steeper because it encompasses everything: all the variables present in the company’s surroundings influence the learning curve. Every little action that may be simple in your country can turn into an authentic odyssey in another.
The classic shape of a learning curve:
Yellow: Beginner’s hell
Green: Learning process
9- Keep yourself updated with the macroeconomics
In our globalized world, the flapping of a butterfly’s wings causes a tsunami. It is of upmost importance to be updated with the global political and economic situation, since we are in an unknown country (if we followed the previous sections, that would not be the case) and our ability to react to unexpected events is fairly limited. We said this earlier: think global, act local. The problem here is that when it comes to acting, the learning curve of any simple action can turn into a big problem.
“It is of upmost importance to be updated with the global political and economic situation, since we are in an unknown country (if we followed the previous sections, that would not be the case) and our ability to react to unexpected events is fairly limited.”
As we have seen, the process of business international expansion is very complicated. There are plenty of variables and we find ourselves in an unknown environment, where every little action is an adventure. This is why there are companies that ease this process, thanks to their local experience in the country where you want to settle and their know-how about the actions you want to carry out. This will help you save a lot of money and avoid many problems when expanding your business globally.
Signed by Guillem Comí.