The sky is the limit in today’s business climate. No business is worth a grain of salt if it cannot expand its outreach worldwide. Yes, you might make a nice enough profit with your local venture, but how long will “nice enough”; last? Will you be able to retire when you reach your Golden Years? Will you be able to afford the lifestyle to which you’ve become accustomed when you no longer work? No, you don’t have to be the next Jeff Bezos and take over the world, but wouldn’t you like to afford those around the world the opportunity to enjoy your product or service? Yes? Okay, keep reading.
Plan Your Global Expansion
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When you opened your business you wrote a business plan to help you see how to turn your idea into a profitable venture within an allotted timeframe. You also used that business plan to secure funding for your startup, which made it easier to realize your dream. Now it’s time to write another business plan, an international business plan, and Entrepreneur magazine explains the tenets of the plan are the same: You want to “evaluate your needs and set your goals.” You must be committed to international growth before you attempt it. It won’t be easy, so make certain you’re ready with a full-proof plan. If you can’t get the plan to look good on paper, you’re not ready.
Research Your Foreign Markets
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With your plan in place, it’s time to identify which foreign markets will work best for you. One excellent resource for information on global business markets is the U.S. Department of Commerce. The DOC keeps a comprehensive database of foreign markets interested in “U.S. goods and services,” according to Entrepreneur, and since it is the cabinet enacted to promote economic growth in the United States, you can bet it’s interested in helping you expand your operation. Along with the DOC, use other reliable resources to determine where you would be best suited to expand your venture. This includes competition. Network with others in your field who have already opened overseas operations.
Determine the Best Distribution Methods
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What you sell will help determine the best distribution methods to get your product or service overseas. In some cases, it may suit you to open global offices or subsidiaries in their respective locations. In other cases, it might be better to work through a local agent or distributor. Each country is different, so once you know the markets in which you want to expand, find out the best way to expand. Worth a whopping $830 million, Sjamsul Nursalim of Indonesia works in coal, property, and retail, and he has expanded his holdings beyond his home country into Singapore. Retail works for Nursalim in Indonesia, whereas property development through local management is his pot of gold in Singapore.
Understand Each Culture
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The term “Ugly American” was first used in 1948, and it’s nothing of which to be proud. You cannot expand overseas if you do not take the time to learn about each location’s business practices, culture, and economic and legal differences. First, operating a business illegally in another country will place you and your business in harm’s way. Second, if you go in the attitude that you don’t have to understand your demographic, your demographic won’t understand you and your expansion will flop. A classic example is American-made cars in Japan. The Japanese do not buy American-made cars because the vehicles are too big, inconvenient, and too expensive to operate and maintain.
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Take the time to understand each culture and find out what works for them. In the case of American automobiles, the driver’s side is on the wrong side for Japan, and most of the cars are too wide for the narrow roadways. Also understand pricing, how to negotiate deals properly with the foreign governments and your overseas business contacts, and all of the export rules and regulations. Your goal should be to set up an expansion plan that will be welcomed by a foreign government and its citizens rather than viewed as ugly. This includes packaging, labeling, and foreign logistics. Leave no stone unturned. Again, seek guidance from appropriate parties.
Don’t Go Too Fast
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Finally, don’t think too big at first. Even if you have enough operating capital to expand to numerous global markets, it might be better to get your feet wet with only one. Once you’ve completed your research, decide the best global market for your product or service and work toward expanding there first. This not only helps you understand the process through crucial experience, it also mitigates your losses. Should the product or service fail in its new market, you only lose one location. If you fail in multiple locations, the financial damage might be unrecoverable. Ultimately you want to think big, but start small to get there for one simple reason…
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When you are wise in your global expansion, your chances of success increase exponentially. Go big or go home, but start small.