Expanding to foreign markets can be daunting for small and medium-sized businesses in the professional or business services industry. These companies often fail to take the risk and limit their growth. Others make a mistake and end up wondering why they failed. Here are some key points and issues to be aware of before you launch an international venture.
Step 1: Market Overview
Find out which country has a market that is large enough to support your services. If you are considering more than one place, choose the first. Only after achieving success in the first market is a service exporter wise will consider moving on to other markets. It may be necessary to target specific regions to narrow down your market research, even if one country is being considered. Avoid following the most popular and most accessible export route. Consider other areas that may be less attractive as they might have untapped potential.
Do not become an exporter by default. Many international expansion decisions depend on the contract “falling in your lap.” One client may contact your company from a specific country and have a need for your services. However, this does not necessarily mean that all markets should be targeted without further research and analysis. Although the client may not be representative, due diligence is still required.
Step 2: Market Analysis
You must ensure that all aspects of your market are covered. These include the market’s reaction to your service, competitive insight, the impact foreign currency exchange rates have on fees charged and costs incurred, as well as consultation with local professionals about local laws and regulations.
Prepare to adapt your services to meet the demands of the target market and the growing demand for your assistance. Be open to cultural differences in customer service, partner relations, and employee and/or employee relations. Don’t assume that there aren’t cultural differences just because English is spoken. Keep in mind that there might be cultural sensitivities in the target market.
It is vital to visit potential markets and establish relationships through face-to-face meetings. Also, it is essential to speak with other companies who have successfully exported their business services to this area. Be prepared to invest more time and money than you anticipated.
Step 3: Market Entry
You have many options when it comes to entering new markets as a business service provider. These include opening a full-service branch office, opening a representative or sales office only, operating through an agency, entering into a partnership agreement with a complementary company, forming joint ventures, or buying a competitor.
It is essential to consider the pros and cons of each route. This would include analyzing the importance of positioning the brand or business name versus the cost efficiency to enter the market through a partner, agent, or agent, as well as market share and profit goals. It also considers whether it is feasible to enter the market by testing the market first through an agent or sales representative before opening an entire branch.
Step 4: Marketing/Business plans
Based on the information from the previous steps, create a market entry strategy. Even if financing is not required, a Business Plan or Strategic Intent must be prepared before the start of any new venture. If there are no local partners involved, design a detailed monthly marketing program that can include both of them. This will be crucial to your success as a business service provider. It usually involves marketing intangibles. You should concentrate on building your image and building relationships.
Diversifying your service or delivery model can help you better serve the market. Cross-cultural considerations should be taken into account. All marketing materials, including websites, must also be translated and localized. This will help you avoid mistakes.
Step 5: Operation Start-up
If your Business Plan calls for opening a branch office in the future, make sure you are familiar with all applicable laws and regulations before setting up systems or hiring staff. For assistance with start-ups, accountants and lawyers who are familiar with local regulations should have been engaged during the market study phase.
To work cross-culturally, adapt any existing systems. This is where the challenge lies: adapting without losing sight of your core values and culture.
Compare the benefits and disadvantages of hiring local staff to fill critical positions. This is a crucial step in ensuring the success of your venture.
Facilitate communication between offices and partners. Translate all relevant information into the local language to avoid miscommunications.
It is essential to be committed to the market for the long term. This new venture might require more perseverance and effort than initially anticipated. The most important thing to remember is the old saying, “The only way to win.”