5 Points to Remember While Taking Your Business Overseas
Errors that should be essentially avoided if you are trying to get your business cross borders successfully
A company that is aiming for the stars eventually aims for global expansion. The topic of global expansion comes to the fore only when a company starts thriving in its home ground with respect to generating revenue and gaining adequate market dominance.
Expanding footprint to global markets has also become a matter of ensuring and extending a company’s dominance in competitive markets. It is a very significant step and demands close and through monitoring. But even when your market dominance gets really strong, “the decision of crossing borders should never be made in isolation,” believes, Amit Gupta, the co-founder of India based InMobi, which has now made its market presence available across +15 countries.
It is a significant leap that makes the minds of the entrepreneurs swarm with more questions than answers. Here are five things that should be noted before businesses should consider any geographical expansion:
- Studying the Market
You can’t just pick any country based on your choice. Crossing borders to enter a new country means you have to thoroughly judge the markets of the prospective countries.
Entering an entirely new market means that you have to check if the product you are trying to take overseas is compatible with the new market you are trying to penetrate. If your product is not market compatible, your company won’t stand a chance to earn any name in any foreign soil. So, find market similarities and make a decision of your expansion accordingly. “After building a meaningful market share in the country, we started looking beyond the country; and we happened to find market similarities in SE Asia and we expanded there,” mentions Gupta. Gupta, who has also founded his second start-up, Yulu Bikes, adds, “Suppose if I try to expand Yulu Bikes to Japan with the notion of reducing the air pollution, it won’t work as the country is already clean.”
- Nature and Size of Your Business
Not every business can be taken overseas at the blink of an eye but you can take them overseas depending on the nature of your business. Global expansion plans also depend on the nature and size of businesses.
When the nature of your offerings is not intricate, you can achieve your dream of going overseas quite easily. Also, when you are offering a product that has mass appeal, the sail tends to get calmer. But when it comes to the expansion of big brands to a new market, the process is neither easy nor trivial. It immediately involves a series of processes for the new market entrant to cope with. Among the several intricacies, the big brands need to put up a research team, a management team, who need to work on a lot of resources, and then run it.
Even though the product or service that you are offering might be compatible with the foreign market, but you need to check the amount of competition that you are putting yourself in. If it is an already well-established market, swarming with competitors, it will be a tough nut for your business to crack.
- Financial Backup
When you start your company, the amount of financial backup that you need gets multiplied several times when you are going overseas with your business. You need a very definite and more than an adequate financial reserve. Financial stability along with structural stability of the company will help you to sustain the unforeseen financial strains that will come along your way.
- Taxes and Policies
When you are a new market entrant, you have to be very vigilant and essentially need to own a meticulous understanding of taxes and policies of the country you are planning to enter.
Knowledge of every business policy and tax should be at the tip of your fingers, otherwise, it won’t be long before you get muddled in tax and regulatory complications.
All the best taking your business overseas!