So, it’s the 21st century, your UK sales are stagnating, and thanks to technological developments, it’s easier than over to expand your business abroad.
“British products and services are in demand, and exploring overseas avenues delivers huge growth potential” according to Steve Childs, Head of International for Business Banking at Barclays. It is still one of the biggest decisions you’ll likely make for your business, involving a lot of risk, and requiring a lot of investment of time and money, so it shouldn’t be taken lightly. However, if executed correctly, it could offer the opportunity for reward in many forms, such as a much larger market, bigger returns, and better brand recognition.
Here are some of the main things to consider in making this important decision, and some tips for getting it right.
Is it a Good Idea to Expand Your Business Abroad?
This is the most important question and should be considered honestly and realistically. A move abroad requires dedication from senior member of staff, and the last thing you want to do is neglect UK operations in favour of a risky venture. A serious mistake that many businesses make is attempting this change too early, so, only focus on new geographical markets if you think your UK base is robust enough to withstand a little less attention, and if focusing on other markets across the globe will not create an opportunity cost for UK ventures.
Is there Demand for this Product in Other Economies?
Market research in the selected country is key. Just because your product works very well in the UK does not mean it will be a hit with Brazilian consumers, or maybe with a slight adjustment it could be. There are agencies that can help you with this, but if you have the budget, the best way to get a feel of the market is to visit the country and speak to your real potential customers. Barriers to entry must be analysed, as well as existing competition. A small business like yours could already exist, which could either mean intense competition, or a potential partnership. You don’t know what you might find.
Do you Need to Alter the Product?
Based on this market research, you may find that a slight adjustment could work wonders for your product’s success in a particular country.
Language is obviously an important thing to consider when moving to any non-English-speaking country. You must translate the packaging and marketing correctly to transfer the meaning you want to portray. Asking a local speaker can help avoid embarrassing mistakes, such as General Motor’s famous blunder with the Chevrolet Nova in Central and Southern America: “no va” means “does not go” in Spanish, which is not a characteristic particularly desired by consumers buying a car (more examples here). Having speakers of the language within your main expansion team is extremely useful, so consider this early on and incorporate it into the recruitment process.
Culture is equally important, and another reason it is a very good idea to visit the country you plan on expanding into. A useful product in the UK may be of no use in another country, purely because of popular routine or beliefs. Think about your McDonalds visits in different countries- although the concept is more or less the same anywhere in the world, in France you find the Milka flavoured McFlurries, in South America everything comes with avocado as standard. These slight modifications to local tastes are an important factor in Mcdonald’s success.
Laws are obviously important to abide by, and you need to make sure you know the ins and outs of these, and their consequences, before you make the decision. The best way to do this is to hire a professional advisor, which could be costly, but could save you a lot of time, risk and money in the long run.
Do you Really Need a Physical Presence?
With the power of the internet not only can you contact almost anyone in the world, but you can also sell your products through an already-implemented platform in another country using their infrastructure and marketing. A much easier and cheaper way to expand your market.
In summary, the most important thing is to ensure you are not putting your UK operations and progress at risk by focusing elsewhere. This is a yes or no answer, and if the answer is yes you are putting it at risk, your business is not ready for the move abroad. If it is ready, focus your resources and time into one country at a time, and do it right, with no silly mistakes. And finally, have a plan and a back up plan prepared. It is a risky decision and you need to be prepared to meet and overcome all sorts of problems, but follow Virtalent’s tips and you could soon be reaping huge potential rewards.