After a good idea grows into a business, it’s natural to have a desire to expand the operation to an entirely new audience. However, much like forging an idea into a full-fledged (and, most importantly, successful) company, establishing a bigger market share, let alone an international presence, is easier said than done. From international business protocols to the customs and cultures of each nation’s consumers themselves, each respective region has its own unique challenges and benefits.
As a European founder, here are six lessons that I learned when I sought to expand my company to the United States. These lessons can apply to any founder, regardless of where they might be headed.
Related: 20 Factors to Consider Before Going Global
1. Pitching is different. Regardless of however you’ve sold your business previously, when entering a new market in a new location, the pitch needs to be adjusted to meet local standards. That could mean tweaking either content or format and beyond. In some cases, a massive overhaul might even be required to make your presentation successful.
In the US, for example, speaking from my own experience, new businesses must have a precise pitch, getting the message across quickly and efficiently. While Europeans reserve 60 to 90 minutes for meetings, only 30 minutes are provided in the US to pitch a product or service. Also, meetings start on time and, more importantly, end on time.
It’s important to look at the market you’re hoping to broaden to. Research potential changes early to set expectations and avoid surprises.
2. Embrace your existing record. Don’t run away from your success in other markets. Just because your product wasn’t born in the market you’re entering, doesn’t mean it won’t or can’t be successful. In fact, it’s quite the opposite. Your prior success breeds new success. Oddly, though, some seem to think this is the case and I’ve seen it firsthand.
When I first considered venturing into the US, several web entrepreneurs in Europe told me that digital products outside the US are labeled as “not invented here.” Some said it gives off an inferior value. But I quickly discovered that’s largely a myth.
If you can show a track record in a significant market, regardless of locality, results aren’t guaranteed, but it makes your pitch a lot stronger. My company’s success overseas has only helped me market our services more effectively and build trust among key audiences.
3. “It’s great” doesn’t mean “yes.” You can prepare as much as possible but, in the end, there will be some cultural communication issues in whatever market you extend into. Whether you’re a US company venturing into Germany or vice versa, local markets have their own established way of saying and doing things.
As an example, with my company’s existing international track record, it was easier to set-up initial biz dev meetings with larger companies in the US. However, first impressions were a bit misleading. I quickly learned that in the US, positive feedback was common and, in some cases, was actually constructive criticism. Phrases like “it’s great” or “we like it” are often used in a meeting but they didn’t necessarily mean that we were close to a deal.
Related: 10 Questions to Ask Before Expanding Overseas
This is a cultural communication issue. In Europe, it can take a fair amount of time before you get a “this is great.” When it’s said, it generally means that your talks have really evolved.
Remember to keep in mind cultural and language differences when having conversations with third parties. Don’t get tripped up by preconceived meanings and don’t make any assumptions on the status of a conversation. Be prepared to track down real decision makers.
4. Picking a headquarters. Where your expansion market headquarters resides is an important question. Many factors contribute to selecting the ideal location for a corporation’s local HQ. Is your business product or sales related? Where you find the talent you need is hugely important when entering a new market.
When my business came to the states, I quickly discovered that Silicon Valley, New York and most of the well-known cities for European technology companies entering the US just weren’t the best options. Our business goals didn’t align with those areas. In the end, I chose Chicago because of its history as a major retail hub. Its central location also made it easier for our team to travel throughout the US.
Make up your mind and choose one primary headquarters location based on the needs of the business to flourish. Don’t make a decision based off what you think you know given trends or general biases.
5. Don’t underestimate personal effort. Many countries have ESTA agreements (electronic system for travel authorization) making business travel a bit easier. Some don’t, however. The US does have ESTA agreements in place with many countries. Try to determine the status of the ESTA agreements in the country you’re looking to enter.
Check if you need a visa. This varies from country to country. Depending on how much time you spend in your expansion market, you may need to file a tax statement or apply for personal identification (Social Security number, etc.). Even opening a bank account can take many weeks to complete.
Travel and the related efforts you put into the process can be exhausting but there’s no other way to accomplish your goals and grow your business effectively. Be committed.
6. Go big or go home. Building a business in a new market is expensive. It requires a lot of funding. In my experiences, user acquisition, legal fees, marketing and salaries are just a few services requiring larger dollar amounts in the US than overseas. The closer you get to the actual product/service launch, the more you need to spend.
My advice is to set a spending limit. Ensure there is enough money reserved to avoid having to raise additional funds after the launch. You want to have some firepower left over from the launch to achieve maximum results.
Although expanding is never easy, knowing what to expect will let your business thrive at any location. Adjust expectations and business plans to cater to your region. Knowing how each area operates prepares a company, no matter how big or small, for success on an international level.
Related: How to Take Your Company Global
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Article source : http://finance.yahoo.com/news/6-tips-expanding-business-internationally-213000356.html
