Taking a company to the "next level" is much more than just rationalizing expenditures. It’s thinking outside of the box and your comfort zone to find additional opportunities and avenues to grow your business. When considering expanding into global markets, it’s easy to feel overwhelmed by all of the things that can go wrong by attempting to navigate these foreign markets politically, economically, and socially.
According to the 2016 American Express Grow Global Survey, small to mid-size businesses revealed the most intimidating international challenges were 65% cultural differences/different business practices in foreign markets, 64% political instability, 59% language barrier difficulties, and 57% had a general lack of knowledge about the oversea markets they were attempting to enter. However intimidating these factors are, expanding into global markets can offer companies opportunities to diversify their operations, tap into a new customer base, and gain new sources for materials and talent.
This article can help mid-market companies identify and address some of the most important first steps as they consider growing globally. No situation is identical, how you look at opportunities will vary from situation to situation. But one principle generally applies: control. Be mindful of which location criteria you can control and which ones you cannot. Remember that each decision you make today has the potential to preserve or diminish the operating latitude you will have in the future. You will generally have more control at the beginning of the process than you will at the end of the process.
Now that you’ve decided to take your company to the “next level”, the first crucial step is research. With your options including almost 200 countries around the globe, research will help narrow down the markets that will present you with the most opportunities. Technology today has made it easier to conduct online research to determine key growth indicators for emerging markets. Find a reliable source and search indicators such as GDP, population, competitors, and relevant taxes.
According to the 2016 American Express Grow Global Survey, about 78% of small and mid-size businesses entered foreign markets intentionally as part of a strategic business decision. Of those businesses, 63% of them feel informed about how to conduct international business, but almost four in ten indicated that they could benefit from additional market knowledge on exporting. While technology makes it easier and faster to search for market knowledge, make sure you are taking control in finding accurate and reliable data.
The Global Survey revealed that of the companies already exporting outside the U.S, 80% saw a boost in revenues after one year. Additionally, 76% of business owners expect that their revenue from sales overseas will increase by about 30%.
While the future of exporting and expanding globally is full of potential and opportunities, it may help to develop relationships with foreign partners to give you a hand in complying with international law and regulations. At Lakelet Advisory Group, we take the time to build and maintain relationships and partnerships with players all over the world. In our experience, we have found two pertinent factors in successful, international operations. These being: patience and over-communicating. Our niche is in China and South American markets.