If you’re considering a business expansion into a new territory, then there are lots of things that you need to bear in mind. Of course, you’ll need the necessary capital to up sticks and move to a new market, but you’ll also require local knowledge, a keen eye for gaps in the market, and a passion for real expansion and growth. Doing it all on your own can be tough, but with the right attitude and support, you’ll be able to transform your company’s fortunes.
Below, we’ve put together some of the lessons that are often learned by entrepreneurs who are expanding into new markets. We’ll share advice on how to maximize your chances of success, and offers words of wisdom for any budding foreign investor ready to get started.
Finding the right market is critical
One of the most important lessons to learn before expanding internationally is finding the right market. There are so many territories around the world, and although it often makes sense to choose the most obvious (the United States into Canada, the United Kingdom into mainland Europe), the truth is that you should look outside of your box and further afield to find success. The best opportunities may not be right in front of you: you must look for them.
There are some incredible Peru business opportunities for willing investors, for example, but the Latin American market may not be one you had initially considered for your business. The Peruvian culinary scene, for example, is truly rocking the boat and allowing foreign investors to grab a slice of a $5 billion industry – and that’s in one small country alone. As you begin to find success in a market like Peru, you can then consider long-term investment and expansion plans further afield, into other Latin American markets such as Ecuador, Bolivia, and Brazil, all of which are close to Peru and offer similar opportunities for growth.
Once you get to grips with doing business in Peru, for example, then you’ll be more confident in the idea of an international roll-out. Sometimes, it takes a leap of faith from an ambitious entrepreneur to truly get a feel for a worldwide market, and one success story can lead to endless expansions into new markets to maximize on growth and utilize new knowledge.
Getting there fast will help you succeed
Once you have decided that you’d like to expand your business into a new market, you should then think about the speed of entry. If you’re too slow to discover and act upon a new opportunity, then a competitor will be given an advantage and will be able to reach your consumers with products and services before you stand a chance. Being slow also means that other businesses have the opportunity to dominate the market and become a household name, simply because they got there first and have been able to focus on brand awareness.
Finally, the speed of entry also relates to your reputation. If you’re the last to enter into a new market, then people will consider you as a follower rather than an industry leader. There’s no doubt that competitors will follow you into a new country, but if you’re the first one to make an impression you will be more likely to find long-term success and build a loyal customer base.
Keep your finger on the ball for new opportunities, and shorten your supply chain to make sure that you can take advantage as soon as a moment arises. You should also strategize – think of ways you can recruit staff quickly, build brand awareness and get the ball rolling. In some industries, it may be wise to dip your foot in the waters by offering an e-commerce version of your main business in a market you’re considering entering into, so you can start to build brand awareness and see whether there’s a demand for your products and services.
That way, if demand is low and consumers aren’t buying into your products or brand, you’ll know that you need to make changes such as localization or consumer research before you get started. It’s better to be safe than sorry, and waste thousands of dollars in the process.
Localizing your business makes sense
There are very few businesses that can cut and paste their offerings in one country and find success overnight in another. The chances are that you’ll need to make some tweaks or even huge changes to capture the attention of potential customers and ensure the smooth running of a new business, so don’t underestimate the research and development required. If your products don’t need to be changed, then perhaps your organizational structure does.
A business model that works in one country won’t necessarily work in one on the other side of the world, as attitudes to networking, sales, and office management can vary greatly. If you’re used to paying employees minimum wage and expecting them to work as many hours as possible, then you’ll have to adapt your management approach to keep staff on your side.
There’s also the issue of localizing your business. There are some incredible Chile business opportunities, but unless you’ve learned the language, understand Chilean etiquette, make some business contacts and incorporate your business to comply with local regulations, you won’t be able to generate sales. Make the effort to localize every aspect of your business no matter how much you have to change and you’ll be able to grow without too much challenge.
Being a good boss is important
Finally, it’s important to remember not to get too far ahead of yourself. Sure, you’ll likely grow to become more competitive and entrepreneurial as you grow, but you shouldn’t lose sight of your core vision, and remember that you wouldn’t be successful without your team.
Keep them in mind during every aspect of your business – involve them in decision making, give them the support and guidance they need to thrive and don’t overlook core members of your departments. It can be easy to get carried away with yourself and cause employees to feel like they’re not valued or that they would be better off working for someone else – pay them generously, schedule regular reviews and catch-ups, and invest in staff development.
Whether you’re considering your first international expansion or you’re on to your tenth, we wish you the very best of luck with your new venture and hope that you find success.