For emerging businesses, global expansion is a huge step. Taking a small business and expanding it globally will require a vast understanding of the markets, competitors, and current local trends. While the process of global expansion will be an intricate one, you will find that the rewards often outweigh the risks. When deciding to expand your business globally there are many things you should consider. In this article, we will highlight four major tips that will give you a leg up in your expansion and help you establish a solid infrastructure to ensure your success.
Tip 1 – Understand The Culture:
Before going global, you must do your due diligence on the culture you are diving into. First, you want to understand how your business is going to benefit the location that you’re expanding to. You want to have a clear understanding of whether or not your product will thrive in the local market. You will also want to determine if there is a demand or if there is a saturation of the product that you are trying to bring to your new market.
You will want to do proper research on your local competition and analyze if and how it will affect your business. Lastly, it is important to note that you may have to adapt your brand to the local culture, so be prepared to make some changes as you consider your expansion. For example, in China, red is a lucky color and green is unlucky, so if your organizations often use green for promotional content, you may want to consider using red if your business is expanding to China. An integral part of expanding globally will be developing a localized strategy to adapt your business and ensure that it fits in well with the culture. Understanding how people buy locally and the culture you are expanding into is crucial to being successful.
Tip 2 – Understanding Your Stakeholders:
You will need to have a game plan for cultural differences. A popular problem that businesses don’t prepare for is the language barrier. In most cases, suppliers, employees, clients, and partners will not speak the same primary language as you. Even if they do speak your primary language, there may be cultural differences in place that make it hard for them to fully understand your message.
For that reason, having the support of a localization company is important and will help you communicate more effectively with the people you do business with. Localization companies can provide you with translation and interpreting services so that proposals, contracts, and even your website can be translated into the primary language of the country you’re entering. Joshua Gould of thebigword Group says that he has seen cases where companies spend millions of dollars to enter new markets but don’t adequately localize their business content which ultimately leads to significant financial costs to the business.
In some cases, companies have had to withdraw from markets as a result of not being able to communicate effectively with their clients. Improper localization was recently an issue at Amazon, who entered the Israeli market without localizing their website adequately. This led to many unhappy vendors who aired grievances publicly, Amazon is now working to address this issue and correctly localize their business. thebigword Group supplies organizations and governments with interpretation and localization services.
Tip 3 – Finances:
Critical to any successful business is a well-organized finance strategy. You will need to establish a financial framework, which will help the economic growth of your business. To do business in your new market you will need to obtain a foreign bank account. You’ll need a bank that’s willing to support your business despite it not having a track record in that region.
It is important to note that you are in new territory and you have yet to establish trading history or rapport with the financial institutions in your new market. Be advised that foreign financial institutions won’t always greet you with a warm welcome. Don’t be discouraged, once you’ve become an established business in the region the financial institutions will be easier to maneuver.
Tip Four – Legal:
To ensure the success of your business and minimize any legal problems, you will want to prepare for any legal matters you may run into. Recognize that the regulations where you are expanding likely differ from ones that you may already be used to. Each country has different laws on regulations such as health and safety, employment and labor protection, consumer protection and advertising restrictions.
Don’t assume that the regulations are similar to the systems that you are used to. For example, in Europe, new parents must get one year paid leave whereas in the United States employers are only required to give twelve weeks. Review the industry regulations in your desired expansion area and prepare to have any certifications obtained. Finding the right attorneys to support your business is crucial, you’ll need labor, commercial, and real estate attorneys for this next step.
For a successful transition, you may want to consider outsourcing to local legal providers. Outsourcing to local providers will allow you to gain insight into the way regulations are operated locally and it can also result in making fewer financial and legal mistakes. Understanding how the government operates in the country you are looking to expand to will save you a lot of time and will help you avoid liabilities.
Global expansion will require a lot of hard work but if you’re up for the challenge the rewards are worth it as global markets offer greater opportunities for growth. Planning out your expansion will make the transition seamless and easier to manage.
Josh Gould – CEO of thebigword Group