4 signs your business is ready to expand abroad
There are plenty of good reasons to consider a change of scenery – even a drastic one. Expanding your business overseas offers a number of new opportunities, better access to resources, a wider clientele base, a fresh source of inspiration and a number of other benefits. It isn’t without its risks, but then again, what major business decision is?
However, the difference between a decision to move abroad and other momentous choices is that the former can bankrupt your company if it isn’t ready. Before you dive in, take a moment to consider some of the criteria that organizations must meet before setting up shop across the ocean.
“Expanding abroad isn’t without its risks, but what major business decision is?”
1. You’ve taken care of your business at home
This might seem obvious, but too often, companies jump at the first chance of global expansion – before they’ve even established a solid client base at home. Additionally, consider what it means to have solid footing in your original location. Markets change, regulations come and go, customers become more or less active. There are many factors to take into account when you gauge your level of success.
Jon Fjeld, executive director of the Center for Entrepreneurship and Innovation at Duke University, explained to Entrepreneur that the litmus test is, what would happen if you took your hands off the controls for a few weeks? Would the business operate smoothly? Companies “need to have the distribution running smoothly enough so that they don’t have to focus on it constantly,” Fjeld pointed out.
2. You’ve done your research
And there is a lot of research to be done. Some of it is obvious: Can you find the employees necessary? Do you have a reliable translator or service? Have you found a suitable location? What about vendors? But no matter what, there are always questions that arise as you move along the process. That’s why you can never do enough research and you can never plan far enough in advance.
“Talk to people in the region you’re moving into who will be in the know,” Quinn Sutton, general manager of Latin and Carribean regions for digital literacy and certification firm Certiport, told Forbes. “Validate your assumptions on the Internet. Take advantage of resources such as the U.S. Chamber of Commerce, which can serve as a fantastic resource for companies planning to expand their business abroad. They can make introductions to the right service partners for you, and they can be highly cost effective.”
Part of your research should also include looking into Global Employer Organization Services. These are third-party entities that help companies send employees overseas when those organizations don’t have an establishment in that location. In other words, GEO Services allow you to send a worker abroad and expand globally without having to set up shop first. This might be a great first step to testing those international waters before you make a full commitment.
3. You tend to get inquiries from the same region
If you do a good portion of business with customers and clients in a specific country or region, maybe you should consider opening a location there, according to Andrew Patricio, founder and CEO of Bizlaunch Media. At least you’ll know there’s interest in what you have to offer, and if those consumers know about your products from another country there’s a good chance you’ll be able to explore more of that market.
But just because all your orders come from Central Europe doesn’t mean you’re guaranteed to succeed with an office in Budapest. Take it slow, do some research and determine why you have had such success in that region. Is it something that will keep up? Would it increase by moving there, or would there be little change? Having global appeal is a prerequisite for moving abroad, but this alone is not enough to warrant that decision.
4. You’re a big fish in a small pond
It’s hard to think of your home country as “small,” but there is certainly a ceiling to the commerce that can be done within the confines of your hometown. If you’ve reached that plateau and are unable to gain new consumers or expand, it could be time to move out of the house.
But be careful you don’t overvalue your own worth. Just because you’ve done great work in one place doesn’t mean that will occur everywhere else you go. With that said, this is the global economy – competition comes not only from the shop down the street but from international firms halfway across the world. If you have ambitions of being the best in the industry, you will have to set your sights on global mobility.