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Expanding Your Small Business Internationally: 10 Areas To Watch

April 12, 2011

Presently, I am assisting several foreign companies with expanding their sales efforts to the United States. This is not new to me.  I previously started-up two European companies and know the difficulties.  It can be a very exciting, yet difficult time.  There seems to be a recurring theme:  even large conglomerates have made mistakes, when trying to expand to a new market.   Wal-Mart failed in GermanyHome Depot failed in China.

Here are 10 areas to watch to save you time, trouble, and money.

1. Don’t assume what has made your company successful on your home turf will make you successful in a foreign market.

Consumer’s motivations for buying can be very different. Cultural differences, local traditions, history, language, and geography play a much larger part in the buying decisions than one can even imagine.

2. Seek Out Clients and Customers already doing business internationally and ask for their advice.

These companies can be useful resources.  They will know the pitfalls, and can possibly offer you the first real contacts to companies in your target country

3. Do a very detailed competitive analysis of your products and services both nationally and internationally.

Know where your products and services stand, both nationally, and internationally.  Know where the competitors are, and what message has made them successful in the market.  Know which segments offer the best opportunity.  Identify the sales / distribution channels that are best.  Consider all aspects of the customer experience, including order administration, documentation, and support.

4. Hire Consultants with a “Can Do” attitude rather than a “Should Do” attitude.

Writing a business plan is important.  However, the first European company I worked for hired a consultant that wrote a 4 inch book on the marketplace and spent $100,000.  Final result was a lot of paper, not a clear strategy, and a plan that was not actionable.  Get consultants that will write shorter reports, but are willing to get your company in the door with potential partners and prospects.

5. Choose the right partner.

Local business partners can be an efficient way to enter a new market.  But, one company that hired me had previously formed a joint venture that lasted only 6 months.  The company did not do its due diligence on the joint partner’s financial status and reputation, and found themselves dealing with a bankrupt company.  Cultural misunderstanding and differences in “normal” business flow can also lead partners to work at cross-purposes.

6. Have staff totally devoted to the pursuit of international business.

You will never succeed, if you have people only part time devoted on the task.  You need dedicated people as your conduits, people willing to accept the differences in the foreign market, and willing to interpret the messages for the rest of your staff.   If there is no one internally assigned to champion the cause, it will be very difficult to grow the business.

7. Budget and plan carefully for International expansion.

How long can you finance an expansion? Developing nationally and internationally takes money. It is a risk.  Be careful not to dilute your monetary efforts so that you can no longer support what has been working well for your business.  If you do not have enough margin built into the products or service, it may not be economically feasible to deliver in a foreign market.

8. Know the local government and trade regulations.

Not knowing enough about local government and trade regulations can be a disaster.  Do you have someone that can help you with the product documentation?  Simple things like usage in grams versus pounds can slow up your sales cycle, give problems in customs, and confuse the customer, and seem like you are not compliant with local rules.

9. Listen first.  Sell later.

Investigate and ask questions first when in front of a prospect.  Do not try to sell too quickly.  Develop that relationship, and show concern about their business and situation first.  In this way, there will be no misunderstandings about how to deliver the best service and products possible.

10. Don’t expect business overnight.

If your sales cycle is normally 3-6 months, double or triple it.  In this way, you know you are allowing enough time for your plan to work.

4 Comments leave one →
  1. Antoinette Kelleher-Raynes permalink
    April 12, 2011 7:39 am

    nice post — very informative and useful – thanks

  2. January 6, 2012 10:45 am

    Good stuff , Many thanks. Coming from North East Scotland it’s good to keep returning to a great websitelike yours, especially with useful additions like the one above. Many thanks and keep up the good work.

Trackbacks

  1. Why You Should Consider Selling Your Products Internationally | The Voice
  2. Reaching Your Customers Internationally | Long-Distance Business

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