When is it the right time to expand internationally? Are you equipped to step into unknown territory? How should one go about it? Read to know the 4 cardinal components of international expansion as you prepare to take your business abroad.
Taking your brand abroad and expanding your business internationally seems only logical if your business is doing well and you have been eyeing the foreign markets. But stepping into the unknown is never easy. There are market uncertainties and fluctuations and so, utmost preparation is necessary to take this leap of faith. At the recently concluded World Franchise Congress, Mac Srinivasan – Global Growth Mentor and CEO, The Abundant Group (with over 35-year experience), shared some quick tips and insights on how to make the journey easy for the businesses.
- Assess: When you feel you are ready to spread your wings, do a thorough assessment to cross check it. Find out how successful you are in your current business? Have you reached that critical point in your operations where you are ‘stable’? If your current operations are functional, you have good finances and a good team to support you, only then you should think of expanding your business.
- Identify the target market: Find out which geography will reap maximum benefits for you. How much investment is needed? How are you going to raise it? What will be the RoI? When are you going to break even? What are the legal and tax compliances and regulations your business will have to abide by?
- Find a reliable partner: Find a local partner / vendor in the foreign land who can help you expand your business with a sense of ease.
- Choose your mode of expansion: You can choose from various ways of business expansion like simply exporting your product, or licensing it, getting into a franchise agreement with a local partner or go for direct investment. Proper due diligence is necessary to make an informed decision on which mode suits your business the best, based on your capacity of investment, risk taking, control over business and legal compliances of your target market.
Check on your ‘LUCK’ to go global, the 4 cardinal components of business expansion to a new territory:
- Location: An appropriate location is a must for a business’ success. Location is of paramount importance in a foreign land. Invest ample time and research well on the location of your new business. Check if it meets your requirements, for eg: availability of cheap labour, good office space, good internet speed etc.
- Understand your core business: you may know your business very well but are you the master of it? Only when you have mastered your own business, you can teach it to others who will in turn help you expand it.
- Connections: When you set about the expansion, don’t ask how to go about it? Ask who can I seek help from? Find people / connections who have done it before, who can mentor you, guide you, partner with you or work with you and help you along the way. Once you find such people, ‘how’ and ‘when’ will automatically be taken care of.
- Knowledge: Knowledge of how people and processes operate in the new territory really help. Also, how you deal with the new clientele in the new place matters a lot. How do you handle the customers, what is your turn out around, are your processes ready?
Once you are there in the new territory, keep a tab on the following “speeds” to know the speed at which your business will grow:
- Functional speed: you are as good as your team and how you train and support them.
- Processing speed: how long do you take for the entire process, right from the time you get the order. This can vary from business to business.
- Timing speed: Businesses need to time their investment, advertisement, promotions etc according to the time of the year that works the best for them (could be based on seasons, festivals, occasions etc.)
- Expansion speed: how fast can you duplicate yourself, your processes, how fast can you train other people; will determine how fast you keep growing.
