10 questions to askbefore expanding overseas

Introduction

Deciding when to go global is a tough call for entrepreneurs. They may be tempted by opportunities in hot markets like China, India or Brazil, but

could risk venturing abroad before they’re fully prepared. While selling overseas extends your company’s reach, you don’t want to

move into international markets too soon and use resources you need to continue growing on your home turf.

① Have I built a solidfoundation at home?

Make sure your business is stable on a day-to-day basis before pursuing overseas markets.

You should determine whether your business could function well in your absence.

Companies also need to have the distribution running smoothly enough so that they don’t have to focus on it constantly.

② Do I have the bench strength for international expansion?

You will need to assign one or two senior employees to your international effort. You need to determine whether you can afford to move people from their current responsibilities, as well as whether they bring–or can quickly develop–the necessary skills for overseas sales and marketing.

③ Will I find the talent I needin another country ?

If you decide to expand, finding local talent can be a challenge. Some countries simply do not have enough of the skilled labor companies may need.

You also will be competing with established companies that know where to find talent and how to recruit local candidates.

One potential source: local educational institutions such as engineering programs and business schools.

④ How will I need to adaptto the local culture?

Some countries such as France and Japan expect companies to adapt to the local culture.

That may mean customizing your product or service to meet local customers’ tastes.

At the very least, you will need to put your marketing message in the local language and make sure the meaning translates correctly.

⑤ Do I understand the cultural implications of the sales process ?

Closing a deal abroad can be a vastly different experience than you’re probably used to. Some cultures struggle to say, “No, we aren’t interested” in a product/service, which means you can have an extremely long and costly sales process that never leads to a sale.

To avoid this problem, look for customers who have bought similar items or services in the past. And sometimes it’s better to cut off talks if they lag for too long.

⑥ Have I sized up thelocal competition ?

Understanding your competitors abroad can provide insights into how – and whether – to expand.

Many companies don’t take time to figure out whether similar products and services are already available in a new market and what they would need to offer to compete successfully.

Spending time abroad and speaking with potential customers can help to avoid costly mistakes.

⑦ Do I need aninternational partner ?

For many companies, it’s critical to find a local partner when expanding overseas. Partners can help facilitate sales, while keeping costs down for the home office.

Forming a partnership takes time – often, a year or longer – and requires plenty of due diligence to find the right fit.

⑧ Am I financially able to sustainan overseas expansion ?

Expanding internationally requires a start-up-like period that’s longer than many entrepreneurs anticipate.

You have to expect to lose money for a while. So, you not only need enough capital to make the initial investment, but you also should have a long-term financial plan in place.

You will likely need to update the plan to reflect actual revenue and expenses as you ramp up in the new market.

⑨ Where is the potentialfor red tape ?

Expanding beyond the domestic market can mean lots of extra paperwork, especially for medical and technology companies.

With such a variety of regulations surrounding exports, it’s important to understand what’s required for your particular industry before attempting to expand abroad.

⑩ Should I simply expandmy online presence ?

For some companies with a strong website, it may not be necessary to establish a physical presence abroad.

You may be able to offer overseas shipping and expand payment options without the hassle of extensive tax regulations.

But at least in some markets, you would need to develop websites in another language that accept the local currency. Online shoppers are more likely to buy when the experience is in their local language [and] local currency.

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