You’ve heard the saying that everyone has to start somewhere, and it’s as true as ever in business. Both Apple and the mom and pop shop down the street started with a single modest location. The difference is that at some point, Apple made a massive jump.
If you have dreams of being the next Apple, you may believe that it’s time to take the leap. At the same time, you know how huge of a transition it is, and you don’t want to make any wrong moves.
Instead of letting the unknown paralyze you, start with these tips for international expansion.
International Expansion Tips for US Businesses
Taking your business international isn’t as easy as carting your product down to Mexico and opening up a shop. Here’s how to make sure it’s the right decision and make it a successful expansion.
Run the Numbers
Like so many decisions in business, deciding to go international will start with math.
An international expansion is an expensive endeavor. Depending on your business model you’ll probably have costs like real estate, hiring, extensive marketing, permits and licenses, and more.
Do a thorough cost analysis to get an idea of the investment you’ll be making. Then find out if you have the financials to cover it. One of the biggest expansion mistakes companies make is starting an international growth plan and running out of money halfway through.
Keep it Gradual
As you start planning the route your expansion will take, remember that age-old wisdom: “Slow and steady wins the race.”
Don’t try to conquer the world in one go. Start with a single country and build your presence there first. Little by little, you can expand more and more to additional countries.
We say this because there are such dramatic differences in doing business between one country and the next. You need to do your due diligence before crossing every and any border.
Most businesses find it easiest to start with the nearest countries to them and move outward. You may begin with Canada, then Mexico, then start expanding into western Europe or South America.
Analyze Your Target Market
We’ve talked about researching your costs and challenges every time you expand into a new country. During that process, you also need to research the market you’re trying to sell to.
Is there a need for products or services like yours in the new country? Does something or someone else fill this need already? Do those customers even have the problem your product or service solves, like US customers did before you appeared?
On top of researching the demand, you need to investigate your competition in each country. If someone else already has a stronghold in your industry and their customers aren’t looking for alternatives, you may not be able to carve out the market share you need.
Investigate the Business Laws
In the US, we have business law attorneys who specialize in the area because even people who are born and raised here don’t understand all the laws and regulations. This is true in other countries too.
Before you enter each new country, you need to work with an attorney to learn about the laws in the country. Find out what types of documentation and testing you need in order to sell in that country.
This should be something you do early in the process too. You may discover that some part of your manufacturing process is banned in the country you planned to enter. This completely changes your cost analysis, so you need to know this early.
Consider Changes to Your Product
Speaking of making changes to your product, legal hurdles aren’t the only reason this may be necessary.
If you’re planning to sell an electronic product in Europe, for instance, you’ll need a different power plug. If you’re expanding to a non-English-speaking country, you’ll need to change your packaging to have the new country’s language.
These are a few of many reasons you could need a whole new product to sell in another country. As with the legal regulations, this needs to be part of your cost analysis before you decide whether to pursue your expansion.
Access Your Network
One of the most useful assets in your corner as you expand your business is your network.
A business contact in your target country could be an invaluable resource. On top of giving you insight into their local scene, they can put you in touch with the right people.
Scour your contacts to see if you know anyone with connections in your target country. If so, fill them in on your plans and perhaps they can introduce you to some people who can help you jumpstart your expansion.
Before you tell anyone about the move you’re planning, though, consult with your business attorney. You may need to ask them to sign a non-disclosure agreement before you fill them in.
Build Up Your US Staff
Most business owners that decide to expand internationally do so when they feel like their US-based business is running smoothly.
Be careful about making assumptions, though. Remember that your US business is running well with you giving it all of your focus, and the same goes for your upper management.
As you and other high-level personnel in your business focus on an expansion, it means you’ll have less time for the US side of the business. You’ll likely need to hire additional staff to pick up the slack.
Taking the Plunge
If you have a thriving business in the US, you probably didn’t get there without doing your due diligence before making major moves. You need to take the same care before taking your business international.
The tips above will guide you through the first steps in your international expansion. As you’ll notice, many of them are based on determining whether the expansion is even the right choice at this time.
If you’re ready to get into the nitty-gritty, call our business attorneys to learn more about your options and the road ahead.