There are all kinds of challenges a business will face, but few are as impactful as the decision of whether or not the time is right to expand into a global market. What began as a small business may have grown over time, and perhaps even grown more than the initial goals and milestones set out. But does that mean the “right move” is to expand into a global market?
It’s a big decision and one that can’t be entered into quickly. Instead, there are key considerations, questions to ask yourself about the business, data and modeling to collect, and steps to follow. In other words, an entire road map is necessary to not only decide if it’s the right move but to map out exactly how you will go about expanding.
That’s exactly what we will discuss here, a road map to global business expansion, which can prove to be essential to the company’s continued success.
Weigh the Benefits of Expanding Globally
A great place to start on this journey is to weigh the benefits of expanding globally. This shouldn’t be a quick exercise where you name a couple of advantages. It needs to be an in-depth analysis of how it can help move the business and its goals forward into the future.
So, what are the key benefits of expanding globally? There are a number actually. One that is becoming more and more evident in today’s turbulent times, thanks to the COVID-19 worldwide pandemic is that it can diversify your customer base. For example, if the company suffers negatively due to a local issue, meaning an issue that is happening in that particular region or country, other global offices/locations won’t necessarily suffer the same negative effects. It’s called risk mitigation, as you’re not putting all your eggs into one basket if you will.
Global expansion can also help to reduce operating costs, which is a huge factor for many businesses. Perhaps you will be able to bring down your overhead costs, your labor costs, materials costs, and so forth. It may even make sense to conduct some parts of the process in one country, and other parts in another country. You can do your research on what makes the most financial sense.
For other companies, compliance and tax advantages act as a huge bonus and a reason to expand globally. Tax deductions alone can make a massive difference to the bottom line.
Then there is the fact that global expansion allows you to tap into skilled and talented workforces in other countries. This alone can have a massive positive impact on the business. As New Horizons points out, when geography no longer plays into where the talent is coming from, the doors can open significantly in terms of global expansion. New Horizons is skilled and experienced in global PEO and staffing, and also points out another big benefit, and that’s the fact that it can also allow you to hire a workforce that is much cheaper.
Does Your Company Display Any Signs that Expansion Is Needed?
Another question to ask is whether or not the company is currently showing any signs that global expansion is necessary or warranted. What are the key signs to look for? There is a number that can act as good indicators.
One of the first signs that can appear is that you max out on your customer base at-home. If there is no way to continue expanding at-home, but you feel the business is in a good position to expand in general, then it can make sense.
Another factor to consider is the supplier, vendor, and customer relationships you’d have globally. Do you already have some deals in place, would you have a problem getting set up, and how would you still be able to deliver the same quality of products and services working with these new suppliers and vendors.
Ask yourself if you have a product or service that would make sense to that local market, region, or country that you would expand to. Would you be offering the same things, or would some changes need to be made? It’s important to get a real sense of the business climate and culture in the areas you have your eyes on for expansion. Customer and competition research would also be necessary.
Then there is the customer demand, do you have international customers showing interest in your products and services? Would it make more sense to base operations in those countries with a high level of interest?
Understand the Process Takes Time
If everything has aligned and the benefits of expanding globally are strong and plentiful, then moving forward should be a measured approach. Sure there is no doubt you are excited to get the ball rolling, but rushing into an expansion means steps will be overlooked and mistakes can be made.
Just as when you laid out your initial business plan when starting your business; that same approach can be used again but with a global twist on it. You’ll need to identify the financial cost of expanding, how you plan to staff your new locations, who the target customer will be, secure warehouse or office space, sign deals with vendors and suppliers, the list goes on and on. All of this means you’re looking at months rather than a few weeks to expand.
This is called your strategy and business plan, and if you need any sort of financing and investments these will be needed, as a lender will want to know you’ve got a viable plan in place.
How Will You Market Your Presence Globally?
Another big thing to consider is how you will market your presence in a global manner? How will you reach your new customer base? While you may have a robust and effective marketing campaign/plan here at home, you shouldn’t assume the same techniques will work abroad. First of all, you may be selling a completely different product line or services. Not only that but you are now dealing with an all-new customer base.
A good place to start is with market research, identifying what your new market is interested in, the best ways to reach them, demographics, the competition, and so forth. Often a digital marketing plan is a good place to start, as it’s both cost-effective and it can reach a large audience at once.
Even with all the best planning, it’s still normal that you will encounter obstacles and challenges. You can see these as lessons where you’ll be able to take away valuable information on what to do and what not to do in the future.
Expanding Globally is a Huge Undertaking that Can Prove to Be Fruitful
At the end of the day, making the choice to expand globally is huge, and shouldn’t be downplayed. While it’s still the same business, for many companies, it acts as an off-shoot offering a different product line or service, the business may use a different structure or set-up, and even the ways in which it markets its products has to change.
Keeping an open mind, showing creativity, and of course, gathering as much pertinent data and details as possible will help ensure the expansion is a success from day one.