Menu
Are you thinking about expanding your business to Poland or Scandinavia ? When you do start thinking about setting up operations abroad, it is important to take a step back and make sure your business is ready. Here is seven steps you should follow to prepare your business for international expansion.
Why do you want to expand to international markets and what are the goals of your international expansion? Make sure that the expansion is part of a carefully thought out growth strategy, rather than a spontaneous project or a way to move away from problems. Make sure also that your offering is clear, focused and attractive, and that you have a long-term perspective with a clear vision.
Be sure the management and key stakeholders are involved and committed to the international expansion. Entering a new market often requires more time and resources than companies expect. A motivated and involved management team is instrumental in being successful with an expansion. If key stakeholders are not on board, it’s a risk of jeopardising the entire initiative.
A solid business foundation is a key to being successful on international markets. If you don’t already have such, make sure to carry out a thorough assessment of internal resources, strengths and weaknesses. The evaluation should typically include an assessment of product/service offering, financial situation, sales and marketing processes, operational efficiency, delivery capacity, human resources and any other key areas within your business.
It’s more important to do the right things than to do things right. That includes focusing on the right markets. It can be very costly to select the wrong export markets. That is why the most successful companies have a fact-based approach to prioritize markets. They put an emphasis on selecting the right markets for their efforts, which enables them to focus both management attention and resources on the most attractive markets.
A market prioritization should pinpoint the most attractive markets where you also have a high likelihood of being successful. Necessary market research might involve looking into high-level factors such as size and growth of potential markets, macro economics, consumer preferences, competition, availability of talent, cultural and language barriers, ease of doing business, as well as the country’s regulatory environment.
A solid financial situation is the next success factor for international expansion. Make sure that not only your finances are sound but also that you have the financial capacity for expansion. You should always make a cost budget for your expansion and build a business case.
The required financial capacity for a new market entry can vary depending on the type of establishment that you’re planning. It’s not uncommon that costs exceed your budget and that it takes longer than expected before sales starts rolling in. Make sure that you’re financially ready for negative surprises and don’t run into financial problems.
There are many options for financing of international expansion. Apart from different kinds of equity and bank financing, you can get project funding in form of export loans and/or subsidies. You might want to look into available financing options in your region.
Last but not least, it’s worth to point out that a focus on profitability increases the likelihood of success in new markets.
Assign a senior member of your team to manage your expansion project and make that person responsible for the success of the venture. By now, you should already understand your internal capabilities and identify areas where you need support. Contact external experts and advisors to get invaluable support throughout the international expansion process. Get in touch with our team. We will be happy to guide you through it.
International expansion is exciting. Making it successful is extremely rewarding and can provide you with the business growth that you’re looking for. With good preparation and solid expansion plan you significantly increase your international success.