From local to global: How to create an international business
The thought of transforming a company from a single market enterprise into an international business preoccupies the mind of most executives. For some, it’s on the immediate horizon, while for others it is more of a long-term goal. However, they do share a commonality – going from local to global is possible for all.
Does that make it any easier? Yes and no. Some argue that its possible without “any sort of grand plan”, while others, such as Virgin’s chief, Sir Richard Branson, are unequivocal in the fact that it’s quite the challenge.
As he noted recently, launching a brand overseas can be “hugely expensive” and barriers to success – such as persuading distributors and retailers to take on a brand they may not be au fait with – can be plentiful.
Nevertheless, as this guide outlines, growing your business to appeal to different audiences around the world is no longer wishful thinking. Sure, it’s a relative leap into the unknown, but that’s part of the experience. So long as you’re confident that your business is in good shape, your product/service has value and you have the utmost trust in yourself, you’re in a good position to embark on quite the adventure.
Are you ready to go international?
This is one of the most important questions you’ll ever ask and the answer lies in the successes you’re currently enjoying at home. A strong foundation here not only demonstrates that you’ve got a solid business model in plan but that you have something that is worth exporting. There will invariably be an overseas audience receptive to what you offer.
Even then, chances are it’s going to be a bumpy ride. Take for example Innocent Drinks, the smoothie and drinks manufacturer, which has found going international a lot more difficult than it anticipated. In the first five years of opening its business to European markets it posted an annual loss.
Innocent Drinks had failed to properly address the inherent differences in working practices on the continent, as its founder Richard Reed acknowledged in an interview with Management Today: “In other countries, the supermarkets aren’t as brutal in their negotiations, but they’re not as good at executing. In the UK, if you agree a deal at a supermarket HQ that your product is going into 400 stores, then that will happen. In other countries, that’s not a guarantee. It’s a total nightmare.”
Have you done your research?
This example from Innocent highlights how overlooking the slightest of details can have a harmful effect on your business, as well as reinforcing the inherent necessity of carrying out thorough market research. Working globally isn’t about opening up your doors to the entire world straight away. It’s about starting small and building up your business incrementally.
Dennis Day, head of Strategic Alliances at the TMF Group and Michael Evans, managing director of the Newport Board Group, highlighted as much in a recent article for Forbes.
They explained: “Taking a small business global is a complex and dynamic process. Gaining a deep understanding of the targeted markets, the competition, current local market trends, and the requirements to successfully launch and drive growth lays an important foundation.”
So ask yourself whether your product and the target market are a match made in heaven; what it is about your product that will trump competitors in this part of the world; the legal implications of operating there – compliance is a particularly convoluted area – and, as we will discuss, how you will manage your finances.
Also, in what is a very overlooked area, properly familiarise yourself with the cultural nuances that make countries unique. Are you, for example, aware of the correct business etiquette – don’t give flowers as a gift in China – and sensitive to the need to adjust your business to fit in with your new audience? If not, you’re going to have a tough time gaining respect.
Where do you stand with finance?
This matter is of the utmost important because it is extremely likely that there is going to be an amplification of your expenses – immediate and long-term – which will have serious implications for your enterprise. In the first few months – even year – of internationalisation, you’re unlikely to see a return on investment.
After all, expansion into a new market will require you to use or access more finance, playing to the adage you have to “spend money to make money”. It’ll also take time to get used to this new way of working, as, in some ways, it’s like starting afresh.
According to UK Trade & Investment, a department within the British government that is tasked with helping businesses successfully adapt to working in international markets, two chief questions need to be answered: “How are you going to fund [overseas expansion] and how and when will you get paid?”
Things to bear in mind include payment methods, the currency you will trade in – note that some countries will have restrictions on foreign currencies – and how best to set up a supply chain payment system. It’s advisable to speak to your bank manager, your accountant and/or your financial controller. UK Trade & Investment also offers advice.
Are you visible online?
As we discussed in a previous article, whether you’re focused on a domestic market or keen to expand overseas, having an optimised, stylish and user-friendly website is an absolute must. These days, in a world that is increasingly online, it pays to stand out from competitors in what is a very busy digital landscape.
However, as we will detail in an upcoming blog, how to make your ecommerce website more effective for an international audience requires more restructuring and technical work than you’d normally get for updating a slightly dated website. If you want to engage with a new audience, your website has to "fit" in terms of aesthetics and content.
“Communication is key, and this means that potential customers should understand what it is you’re trying to sell,” noted the freelance writer Eleanor Ross in the Guardian last year.
“Do you cross your fingers and hope that the Google translate button pops up alongside your URL? Or do you hire someone to translate your entire website into several languages?”
Yes to the latter, no the former. A seasoned language service provider, with access to SEO linguists, in-country translators and digital professionals can as a collective team offer businesses bespoke solutions. Not only will your website be visible, it’ll be relevant.
Ready to go global?
Going global is risky and exciting, challenging and empowering and full of opportunities. There are also hurdles aplenty to overcome. You’ll be put through your paces, delve way beyond your comfort zone and on occasion, venture into the unknown.
Yet, with patience – and “perseverance”, as Innocent’s Mr Reed pointed out – hard work and ambition, you can duplicate your successes at a local level and establish your brand in multiple markets.