The Ultimate Guide
If you’re anything like my clients, your story probably goes something like this:
You started your business 10-15 years ago, on your kitchen table or in your garage. It started small, with just a client or two, you figured things out as you went and over time, it grew.
These days, you’re a grown-up company. You have offices and staff, a board and millions of dollars in revenue and expenses to manage each year. Your team has fantastic technical expertise, your clients love your work, you’ve done well. But you’re still hungry. You want more. You have a vision to scale your company internationally, so that people everywhere can experience the beautiful products and amazing solutions that you create. You want to amplify your impact. There’s just one small problem. Where do you start? Expanding internationally seems like a huge, complicated project and you’re not entirely sure about what your first step ought to be. You know it’s something you need to do, but you’re not clear about what that looks like, or how to make it a reality. If that sounds like you read on. I’ve created the Ultimate Guide to International Expansion for business owners who want to scale a business internationally and need a little help to get started. In the next little while I’ll show you the three key things that you need to successfully scale a business internationally and the core areas of business that you’ll need to consider as you do so.
Let’s get started.
First things first… let’s get some clarity
You must first clearly see a thing in your mind before you can do it. – Alex Morrison Getting real clarity on what you want to create and why is the first critical step in being about to successfully scale your business internationally. That’s because, as someone once said “Clarity is power – the more clear you are about EXACTLY what it is you want, the more your brains know how to get there.”
In other words, until you have a crystal clear vision about what you want to create on the international stage and why, you’ll struggle to come up with a winning plan for making your idea a reality. When I talk about ‘crystal clear vision’ I don’t mean a CEO who says, for example
“I want to expand our company to China so that we can generate more revenue”.
I’m talking about the leader who says, for example,
“My vision is to expand our company into China. I believe that our product will appeal to elderly, middle-class Chinese in second and third-tier cities, because it will address some of the significant quality-of-life issues that people in those cities face. I know we can address those problems at a price that they can afford. In five years time, I’d like us to have offices in Chengdu, Wuhan, Hangzhou and Daqing and 20 staff on the ground in those cities. I expect that we’ll be turning over $30-$40 million a year from the Chinese market in that timeframe and that we’d be giving back $1-2 million to local communities in the form of social care programs for the elderly”.
While the first example spells out a very general proposition, which everyone can understand, it doesn’t articulate any goals or targets, which we can use to plot a course or to measure success. Without that clarity of vision as to what must be achieved, it’s difficult to put quality plans in place. It’s a little like getting in car and driving without a destination in mind – how do you know when you’ve arrived?
The first example also doesn’t give any clues to a motivation other than profit. While making money will obviously be one of the reasons for expanding overseas, it’s far easier to get people inspired, motivated and committed to an international expansion plan when there is a deeper, more compelling motivation involved.
That’s why the first step on the road to international expansion should be getting clarity about what you and your company plan to do, and why.
Strategy – your roadmap to success
Once you have clarity on the scope and shape of your international project, you’ll need a strategy, a roadmap to achieving your ‘big picture’.
Without a roadmap, your crystal clear vision will remain just that – a vision, without a lot of substance behind it. So what should your roadmap look like?
Ideally, your strategy should be a plan in the form of a document, which sets out how you will achieve your ‘big picture’ in a way which anyone can understand. It must cover all of the key areas that you will need to address as you take the business overseas, from finance to distribution, to international marketing, taxation and a whole range of other things.
A good strategy will include milestones and metrics for each of the areas you address. It will also make clear links between your goals and aspirations and the work that you will do to reach them. A good strategy doesn’t need to be long, but it does need to be clear. I believe the best strategies run to a couple
It’s imperative that your strategy doesn’t sit in a drawer somewhere. Everyone on your team should understand the roadmap, where they fit on it and how they need to contribute to realise the ‘big picture’. What’s more, you and your team should regularly review the strategy and make sure that it can deliver what you need. If it can’t, you’ll need to make some tweaks so that you stay on course to achieve your vision.
Momentum – your secret ingredient
Momentum is “the impetus gained by a moving object’ and without it, your international expansion is going nowhere, fast.
In a business sense, I like to think of momentum as the impetus gained by a team, as they move forward towards a common objective. Momentum in action is a beautiful thing to see – a group of individuals, working together to achieve a specific project: goals being set, work being done, milestones being achieved, progress being made and celebrated, bigger goals being set, a vision unfurling.
Unfortunately, momentum is also one of things that business owners, entrepreneurs and CEOs struggle with most, especially when it comes to international growth. Why? There are multiple reasons.
Some leaders are apathetic, they lack the drive and ambition to get out there and tackle the challenge of taking a company overseas. “International expansion is a nice idea”, these people say “but it seems like lot of hard work…”.
For some entrepreneurs, it’s a question of focus. They see other companies taking their business offshore and think “it would be great if we could do that”, but the day-to-day demands and distractions of the domestic business keep them in such a tailspin that they never make the time to think strategically or to take a course of action that will put them on the path to international success. Time passes, they toy with the idea, go on a trade mission or sell a thing or two abroad. But they never get serious and the international plan never amounts to anything. Others get started, but the gravitational pull of “business as usual” prevents the international side of the business from ever really taking off.
No matter how clear the vision or how great the strategy, it’s all a waste of time if you can’t inspire, empower and equip yourself and your team to embark on the international project and complete it.
The difference between the businesses that I’ve just described, where momentum is lacking and those where it is present is striking, especially where it’s combined with clarity of vision and purpose and a great strategy. In these companies, the leader and the team are rocketing along at a hundred miles an hour, straight towards their goal. They know what they’re doing and why, everyone understands what’s required of them and they’re excited to show up each day and make progress on achieving their big picture. This is place of real focus and a whole different set of values and behaviours. It’s compelling, it’s magnetic, it’s powerful.
If you want to make your international business a success, you need momentum.
“What Key Areas Do I Need to Consider?”
Now let’s get down to tin tacks and talk about the core topics that you’ll need to address and the key things you’ll need to do as you start to grow internationally, or earlier. Some of these are more exciting than others, but they’re all central to your success.
To be successful in international markets, you need to be clued in to international cultures – how they are different to your own culture, what values matter to people from those cultures and what kinds of preferences your potential clients in those cultures are likely to have.
Understanding the culture of the country you want to expand to will inform not just what you sell, but how you sell it, and should influence everything from how you run initial meetings with potential clients and suppliers, right through to how you collect payment and supply after-sales service.
Culture is a huge and multi-faceted topic, but there are a few simple things that you can do to begin equipping yourself, even early on. You can read widely on your chosen country, join a relevant chamber of commerce or industry association, get some cross-cultural training, and plan a market visit. When your plans are more evolved you can also create culturally relevant marketing materials and campaigns, translate and localise the company website and hire team members or consultants with experience in the culture of the country you are targeting.
To get traction in international markets, you’ll need a powerful pitch which resonates with your international clients and partners and a crystal clear marketing strategy that enables you to build influence and credibility on a global scale. Build in a turbo-charged lead generation funnel and you’ll have the leads you need to reach the clients you want.
One of the biggest mistakes that companies make in this space is that they try to “copy, paste” whatever marketing strategy has worked in the home market to the new market. Unfortunately, this approach is often unsuccessful, because each market is different. Language, social cues and tastes vary, social media channels, usage patterns and penetration rates differ and regulations affect how your company can market itself to varying degrees in different places. That’s not to say that if you already have a marketing strategy that works that you should abandon it and start over. By all means take what has been successful and apply it internationally, remembering that you’ll need to make allowances and adjustments to account for the cultural, structural and regulatory specificities of your target country.
When I start talking about regulatory frameworks, I often notice people’s eyes starting to glaze over. It’s hard to make this topic sexy, but it’s important that you really understand the regulatory environment of your international market, because there’s a lot that can go wrong in this space.
Because regulatory stuff isn’t fun, business owners and entrepreneurs are sometimes tempted to skimp on research and keeping up to date on regulatory development. This can be fatal, because regulation touches nearly all facets of your business operation in a new country and will determine to a large extent what you can and can’t do.
Cashflow is oxygen for your business, so it’s vital to understand what kind of financial resources your international venture will require and get them lined up before you need them.
In the excitement of planning an international expansion, it’s all too easy to underestimate the costs of the exercise, or to assume that you’re going to incur the same costs that you incur at home, in a different currency. Failure to resource properly and unexpected contingent costs are two of the big danger areas for companies starting out in the international space, and in order to protect yourself, it’s a good idea to have some financial modelling done by someone who understands international business and to map out and forecasts before you go conducting expensive market visits or outlaying large sums of capital to get set up somewhere.
It also pays to do your homework on the range of funding options available in case you need them as you go. These obviously vary depending on where you are based but include,bank debt, equity, government loans and grants, crowd-funding and angel investment. Start early on this so that if you do need extra sources of capital you’re prepared in advance, not scrambling to build relationships and source money at the eleventh hour.