20 Dec 5 Things To Consider When Expanding Your Business Globally
Expanding your business globally is a big step forward. On one hand, taking a business globally opens endless opportunities. However, if it’s planned recklessly it can cause a lot of trouble.
The business you’ve been running has grown over the time. The strategy the company implements is clearly the right one, and it has attracted plenty of clients. The last several years have been so successful that you are thinking of expanding your business internationally.
Operating a business on an international scale requires taking into account a completely new set of factors: local buying habits, overcoming language and cultural barriers, considering new payment methods, etc. As an entrepreneur who’s thinking of expanding your business globally, these are the vital things for you to consider:
- Research all legal regulations
- Create a long-term financial plan
- Adapt the content of your website
- Understand the cultural environment.
Keep these at the center of you’re planning.
Relevance of International Law
First and foremost, make a thorough research on all laws and statutes related to your industry as you go globally. Keep in mind that something which is allowed in your country may be prohibited in the other. Environmental laws are particularly sensitive. Labor and safety regulations are also on the list of priorities.
The legal environment is complex and you need to pay special attention to the nitty-gritty things. It determines the limits of operating a business. Understanding and translating laws, copyrights and contracts in an appropriate manner is of the key importance before taking the first steps in the new market.
Creating a Global Marketing Business Plan
How much money do you need to invest in a new market? What sales rate do you expect in the first year? When will a new market become profitable? These are all the questions that need to be answered prior to entering the international markets and expanding your business globally.
Creating a detailed financial plan is probably something you’re used to since the company you run is on solid ground. The initial investment often requires significant financial assets, thus, carefully assess whether your capital is large enough.
New markets can be unpredictable, thus, it might take some time before you are in the black. Prepare yourself for a longer period without profit. There’s always the possibility that a foreign market will reject your product. Analyze your business and see how you will overcome a potential failure.
Plan your financial investments wisely and be prepared for the worst-case scenario. Implement ‘expect the unexpected’ tactic and don’t let anything surprises you. Plan your marketing tactics to account for these factors.
Price Is Important When Expanding Your Business Globally
Prices are an integral part of a financial plan. They directly determine the revenues along with a number of sold products. Selling products internationally at the same price as in your domestic country is, in most cases, unrealistic. Transportation costs, exchange rates and taxes have a direct impact on the cost of products.
Determining the price will depend on numerous factors:
- What price are customers ready to pay?
- How is your competition pricing the products?
- What are the exchange rates? Are they stable or do they tend to fluctuate?
- What are the taxes involved?
- What about transportation costs?
Crunch the numbers and determine the minimum and maximum price you can go with. Implement it in the financial plan and determine when you expect to become profitable.
Creating Global Digital Experiences for Local Audiences
There’s no doubt your website has delivered the goods so far. Nevertheless, you need to consider adapting the content to the clients from other countries. Although English is a common language throughout the world, if you really want to approach your customers you need to have a version of the website in a local language.
Think globally, act locally – a parole you always need to have in your mind when operating internationally. Don’t just translate the content literally. Adjust it to the potential clients you talk to. In case you don’t speak the language, employ a person who does or outsource these services.
Understanding the Importance of Culture in Global Business
Translating a website into a local language is just the tip of the iceberg. There’s a whole set of cultural factors to consider when expanding a business to other markets. These factors depend on every country and can significantly differ amongst each other.
A famous producer of table tennis balls from the US decided to expand its business to the Japanese market. The sport is popular in that part of Asia, and they saw a place for their products. The company was quite surprised when they failed. The reason? They were selling a four-pack. Number four is pronounced the same as the word for ‘death’ in Japanese, thus, people generally avoid everything that contains four pieces.
Research will be your go-to strategy before anything else. Learn about why other companies fail when expanding globally.
Conduct a market research methodically. Find out all cultural peculiarities of a market and implement them in your international strategy. If you believe you won’t be up to the task, consider hiring a market-research company. Such a firm should be experienced, and may already have certain information about the country to which you’re expanding your business globally.