How to Have a Global Vision: Top Tips on Entering New Markets
You’ve successfully grown your business and secured a solid foothold in your domestic market. That’s great, especially when statistics from the European Commission show that more than 50 percent of European businesses fail in the first five years.
So, what’s next? Chances are that you are now turning your attention toward international expansion and how to achieve it successfully.
When it comes to internationalisation, there can be a temptation to believe that replicating your success in a neighbouring territory will be relatively straightforward. After all, your product has been developed and market tested, your customer service operation is up and running with established protocols, your branding and key messaging is clearly defined—there should be much less to think about this time round, right?
Unfortunately not—at least, not in my experience. In 2012, I started a leisure business in Scotland and realised I couldn’t afford any of the mobile Point of Sale (POS) systems on the market, so I turned to my friend and software developer, Paul, and asked if he could build me one in the form of an iPad app. It wasn’t long before this very system got noticed by other traders who wanted one for themselves. Suddenly we had a new business on our hands and we called it Intelligent Point of Sale (IPOS). Over four years, we grew the payment systems business before it was acquired by iZettle in 2016, which itself was acquired by PayPal in 2018 for $2.2 billion.
Prior to the acquisition by iZettle, our software-as-a-service product had established a leading position in the UK marketplace and had been found and adopted by customers in far-flung places such as Ghana, Yemen and St. Lucia.
However, our serious internationalisation efforts came post-sale. iZettle wanted us to be in all the markets they operated in, all eight of them. No easy feat. The learning curve that followed was a steep one, but one that will inform Paul and I in the growth of our new business venture, Boundary.
So if you are considering foreign expansion, here is my own personal pick of things you’ll need to think about when entering a new market:
It sounds obvious, but you need to think about the various languages that you will be expected to communicate in when entering a new territory. In the case of a software product or website, if your code hasn’t been written in a way that can easily accommodate translations, you’re going to have to reconfigure things so that it can. This can take time that you don’t necessarily have so get to work on this early—it has the capacity to derail your entire launch if it’s left too late.
Quality of translations
So you’ve translated your text into another language but are the translations actually any good? After all, you wouldn’t let any old native speaker of your own language write your marketing communications materials, would you? What about things like style and tone of voice – does that translate or do you need to adapt your pitch to meet the cultural expectations of your new target market? Think through this carefully and don’t rush into it. It’s vital that you get it right.
Multilingual customer support
With a multilingual customer base comes a need for multilingual customer support covering a range of time zones. Firstly, you need to find and recruit the multilingual talent you require, but you also need to think about where will they be based. Should they be with your existing customer support team or at a new location within the new target market? If they are overseas think about how will they integrate with the rest of your team, and if they are at home, consider whether or not your existing premises can accommodate the extra working hours needed to service different time zones.
Product market fit
Each market will have its own unique players, its own traditions and its own particular quirks, any one of which could have major influence on your success. This is why it’s crucial to do your research and preparation in advance of your official launch. Sourcing local expertise to point out any potential pitfalls in your strategy should be an essential part of your pre-launch activity.
The regulations relating to your particular product or service can vary dramatically from market to market. With IPOS, for example, we were surprised to learn that in Sweden, all point of sale products need to connect directly to central government via a black box. That required us to undertake some fairly complex customer integrations before we were even able to legally trade in the market. The lesson: don’t underestimate the time it might take you to navigate the regulatory requirements of a new market.
You’ve also got to think about how you actually take payment in other markets, about pricing your products and services in different currencies, about international tax rates and local tax obligations, among other things. The list is extensive but don’t underestimate its importance.
One thing is for certain, if you want to avoid becoming one of the 50 percent of SMEs that never make it beyond five years, international expansion should be treated with caution and real commitment from your entire team. Every part of your existing operation needs to be thinking well in advance of any international expansion about the market-specific challenges ahead and what additional resources might be required.
If you’ve managed to dominate your own domestic market with a team of 45 people, for example, don’t imagine that you’ll be able to service a new market as simply as ‘add on’ to your existing operation. You won’t. It might require an additional team of 10 to 15 more people to successfully enter the territory.The bottom line is that you need to truly commit to internationalisation in order to make it work: do your research, adapt your offering as required and be ready to commit significant dedicated resources to each and every new market you enter. Do this and you’ll have success on your hands.