Not every moment is the best for going from local to international, and there’s never a guarantee that things will be smooth.
However, when you think your business is ready to leap, you can boost your revenue and reach new customers worldwide if you do it right.
How to know when is the right moment? Well, there are several signs to look for that will tell you if your business is ready to expand abroad.
Researching the Local Markets You Plan to Enter
Before you expand into an international market, it is essential to understand the local culture, as it will affect the way you market your products and services in the first place. It will also impact how you communicate with customers.
Often, local research is done in person with customers and prospects. They are your target market, and your goal is to get to know their preferences and goals. These can then be used to improve both your product and customer service experience.
It’s a more complex process than we just said, but that’s something to begin with.
Once you have a firm understanding of the local market, you’re probably not ready yet – but the good news is that you can begin to plan your entry strategy.
Depending on the size of your business, you may choose to enter up to 3-5 foreign markets at a time. Less than 3 makes you stay local and won’t take all the advantages of going global.
The next thing is to get a good idea of what kind of competition you might face by looking at industry publications and newsletters. These will provide insight into consumer buying patterns and which types of competitors are doing well in your area of the world – Optimize the use of this data.
Using local market research will also allow you to understand the types of payment methods your potential consumers are willing to use, allowing you to tailor your payment strategy to meet their needs.
Know Where You Want to Start
A few well-known desirable destinations for expanding your business from the US have existed for many years. If you come to the point where you want to move your business, these three destinations should be at the top of your list.
Hong Kong
Hong Kong is a highly competitive economy and one of the best places to expand your business. It offers a free-trade environment and a highly developed infrastructure that meets international standards. It boasts a low crime rate, making it an ideal place for your business to grow. However, there are many laws and regulations to be familiarized with, so make sure you understand them before expanding your business.
The local etiquette and culture of the area where you plan to expand your business are very important. We don’t hear this often, but prospects and customers are eager to see new businesses that respect their customs and traditions. Keep in mind that Hong Kong is a very distinct place.
Along with a good marketing strategy, knowing where your partners and customers come from will help ensure that your business runs smoothly and successfully in the new location.
Singapore
Singapore has long been another favorite location for many multinational businesses. It offers a stable political environment and a range of pro-business government initiatives, making it an ideal place to set up a business.
The country also boasts a high-quality education system and competitive employee wages. This means that people have money, making it an excellent place for new businesses (if done right!) to flourish.
The bad news is that Singapore is one of the most expensive countries to live and work in. Its high cost of living can make it difficult for you to sustain your company.
Another thing to remember is that the country’s ever-tightening international labor quotas can create labor shortages for your business. This can impact your ability to hire qualified people and grow your business.
Now, the good news. In Singapore, you can rule several regions – Its business-friendly environment, centralized location, and connectivity to other markets in Asia have made it an excellent base for regional operations.
Invest in practical training and compliance strategy if you expand your business to Singapore. A good team of local talent can make a huge difference.
Ireland
The second-lowest corporate tax rate in Europe and one of the most educated labor pools in the world make Ireland an attractive destination for expanding your business.
As a committed member of the European Union, Ireland provides a trading gateway to a marketplace of 500 million consumers while offering companies access to an experienced talent pool and an EU hub. It’s rising in international prominence.
Ireland offers a ton of business-friendly incentives for foreign investors. These include a 25% tax credit for research and development costs, double taxation agreements with dozens of countries, and numerous other things.
Again – Understand your goals and the country’s requirements before expanding to a new market. If you can afford it, work with an international expansion expert who can help you navigate the process.
Assessing Your Market Readiness
This assessment should help you understand your business’s readiness to go international and the potential roadblocks you may encounter.
Market readiness can be measured using different frameworks regarding Technology Readiness Level (TRL) and Market Readiness Level (MRL).
- TRL refers to the stage where your technology is ready for commercial production.
- MRL is when your product or service is ready for the market.
Consider whether or not you have the capabilities and resources needed to enter a new market. This includes:
- Management support
- Financing
- Sales and distribution
- Intellectual property protection
SMEs often underestimate the costs associated with exporting and fail to factor these expenses into their budgets.
Be careful about what many businesses don’t do the right way, as many funding opportunities are available to SMEs looking to enter new markets abroad. And you can take advantage early in the run.
Analyzing Your Competition Globally
This analysis aims to determine how well your brand compares to others in your industry and identify areas of improvement.
Conduct a competitive analysis by using research reports and company profiles. These will give you a clear picture of what companies in your industry are doing to attract and retain customers.
Another great way to conduct a practical competitor analysis is through online tools such as SEMrush. These tools allow you to search for keywords and track your competitors’ websites easily.
Once you have a list of potential competitors, you can begin your competitive analysis by thoroughly reviewing their websites and online marketing strategies. You can then compile this information into a spreadsheet to identify your strengths and weaknesses.
Copy the good stuff from your competitors and never feel wrong about that – Every successful business does it to some extent.
You can also analyze your competition’s content to determine what content your competitors produce and how much they invest in it. This can give you insight into what types of content your target audience is looking for and how you can improve your own content strategy to reach them.
Identifying Potential Roadblocks
This is done right before your business expands abroad. Identify any potential roadblocks that could interfere with the success of your project. Some of these obstacles can be technical or cultural, and there are many more that only you will know once you encounter them.
A key challenge to internationalization is the need to create a product adaptable to various foreign cultures. This means that your company will need to change its business model. And sometimes these changes will be huge.
Another common challenge is regulatory compliance, especially regarding tax obligations and regulations in each country. Companies must be able to meet these requirements before they can enter the market, and that will take time and resources to achieve. A local legal team could make this process smooth.
Where do many of your competitors go wrong? They all face roadblocks and make mistakes, including structural barriers such as management structure and expertise. There are also informational barriers, such as a lack of reliable data about the foreign market.
Take care to be the one who gets it right.
Final Word
Going international? Evaluate your company’s financial stability and resources and determine if it is ready for expansion.
Consider market conditions, government regulations, and cultural differences to ensure you are well-prepared for the challenges.
Understand that international expansion can be a long and complicated process, but it can help your business reach new heights if done correctly.
The decision on when to go international should be based on carefully considering all the abovementioned factors.
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