A successfully growing business is the goal for every owner. Global expansion is a big undertaking, but it is also an enormous opportunity for growth.
The idea of expanding your business globally is attractive for many reasons. It provides opportunities and benefits that your home country may never offer, including access to new markets and talent. You’ll want to be sure you’re expanding wisely, however, and to do so, you’ll need the right strategy.
Whether you’re considering beginning an international expansion or you’re in the middle of revising your expansion plan, you’ll want to examine these five strategies to ensure you are successfully profiting from global expansion. Adopting one or more of them could be the difference between runaway success and an expansion strategy that falls short of your goals.
1. Pick the Right Partners for Global Expansion
As you move outward from your home country, you’ll likely realize foreign markets can be difficult to crack. You may not have the understanding of the local culture needed to drive demand for your product or service right away. You might not know where to find the talent you need.
Other challenges abound, from new currencies to human resources legislation compliance to tax law. Everything is going to be different, so it is easy to make missteps during the early stages of your global expansion.
One of the best things you can do to mitigate any potential missteps is to find partners to work with as you enter new markets. Bringing on a professional employer organization (PEO) should be your first move when planning your global expansion. They will have the skills and resources to help you navigate new business regulations, recruit local talent, and understand local cultures.
2. Adopt a Clear Strategy for Your Product or Service
The next thing you’ll want to consider when you’re expanding internationally is how your product or service will be received around the world. Conduct comprehensive market research where you are considering expansion, and understand the potential demand, and where your product or service will fit within the current market. What sets you apart? Why should people want what your business offers?
A clear product or service strategy will help you define and redefine yourself in shifting markets. This helps potential clients and customers get to know who you are and what you offer. Introducing new products or services to existing markets is tough, developing your understanding of what will make clients choose your brand will be key to your international success.
3. Think Proactively
Many business owners operate in a state of reactivity. They are responding to crises as they arise, and haven’t developed the flexibility or strategies to anticipate future challenges. This may work in your home market where you can stand to take a few more risks. You know the market well, and you have the infrastructure to react quickly to changes.
When a global expansion is the end game, however, a reactive strategy won’t serve you well. Responding to challenges as they arise leave you lurching from crisis to crisis or taking unnecessary risks. In unfamiliar markets, you won’t be given the leeway to successfully operate reactively.
Instead, plan a long-term strategy and try to anticipate the changes in the market you’re likely to encounter. Understand the challenges you could potentially face, develop action plans, and be ready to take proactive steps to maintain the integrity and success of your business expansion strategy.
4. Reinvest in the Business
A big part of your proactive planning is developing strategies to put the revenues from your global expansion to work. You should look at revenue gains from a global expansion as opportunities for reinvestment. You may decide to use this money to reinvest in the market or to finance your expansion into other global markets.
This strategy creates a cascading effect, whereby each market you expand to funds additional expansions. If your sights are truly set on a global expansion, this is a great way to achieve it.
5. Go Lean in a New Market
You should be entering international markets with a lean approach. Lean business approaches offer the flexibility to “fail-fast.” You can quickly learn what works and what doesn’t, and make rapid changes as you are understanding a new global market. Hold off on investing in infrastructure until you’re sure the new expansion is viable. Local employees can help you evaluate your opportunities and fine-tune your strategy, continuously iterating your product or service to best fit your new market.
If you’re thinking about going global with your business, these five strategies will set you up for success. If you need more advice as you expand your business globally, the Payroll Edge is here to help.