Note to readers: this blog is written largely from a B2B and fintech perspective.
International expansion is a vision for many growth companies.
Whether they are looking to embark on a transatlantic journey to build profitable business relationships in the US, or are considering a market entry strategy for EU operations, reaping the potential benefits of overseas expansion involves careful and strategic planning, laying the foundations for a strong local network and the need to be adaptable in today’s turbulent cross-border business world.
“Good fortune is what happens when opportunity meets with planning.”*
This blog does not attempt to set out a comprehensive “how to” guide for creating the perfect strategy for international growth (if that is even possible…). However, knowing the market (thinking not only of your potential customer base but also of your potential competitors), understanding the relevant regulatory landscape and potential hurdles that might be encountered, in addition to gaining a thorough understanding of the costs involved (including how these will be financed), are all respectable starting points, in my experience.
Obtaining the necessary permits, authorisations or licences to allow a business to operate in another country can take months, or even years, depending on the complexity and requirements of the legal system that you are dealing with. In addition, legal structure, local hiring, IP protection and regulatory compliance are all equally deserving of careful thought and attention. Advice from local lawyers is therefore crucial – and discussing costs and timings upfront ensures that there are no surprises down the line. In a similar vein, tax should never be overlooked. Not only can the US and European tax systems, by way of example, prove to be complex, but the tax implications of a company’s international expansion plans may be a blocker to profitability.
More generally, or rather, more practically, it can be helpful to think about your product offering through the eyes of a new customer in your targeted jurisdiction. How might time differences impact your services? Do your terms and conditions or marketing materials need to be adapted or translated? What about cultural differences that may need to be taken into consideration? Tailoring your user experience to cater for local audiences will carve the route for successful strategic international growth planning.
“A friend is a gift you give yourself.”**
Successful business relationships are, unquestionably, fundamental to running a profitable enterprise.
It follows therefore that when planning for international expansion, strong and dependable relationships in the local market will allow for a smoother transition into those international territories. Sometimes these friends can initially be found closer to home and tapping into existing connections with investors, partners and advisors is often a good starting point. Each journey towards international growth is unique but it is very likely that there are others in your existing network who have experience (good or bad) in what you may be trying to achieve, so finding them and seeking out that knowledge might provide invaluable guidance – or help you avoid similar pitfalls.
Professional advisors and industry associations can also add credibility to your brand in new territories with the added benefit of their existing networks being ripe for the picking.
Finally, entering into a new international market should not be taken lightly. Hiring the appropriate resource to commit to the endeavour will likely be required, with people on the ground if and when the time is right.
“We cannot direct the wind, but we can adjust the sails.”***
Careful and strategic planning is all well and good, yet regulation is in a perpetual state of flux; economic uncertainty does not appear to be disappearing any time soon; and corporate and consumer attitudes are constantly shifting.
When it comes to planning for international growth, a good plan is an agile one and proactively thinking about “what ifs” or alternative options (should something fail) is likely to make the inevitable twists and turns in a company’s international growth journey more manageable (or, to put it less euphemistically, less catastrophic) than a purely reactive approach.
Staying informed of regulatory changes that may be on the horizon and conducting ongoing market research will help businesses to change tack when required. Industry events, webinars, insight blogs and market commentaries – even social media, are excellent tools for staying informed and will position a company to adapt its international growth strategy quickly and effectively if needed.
At the end of the day and as they say: knowledge is power – and there can never be too much of that for a business laying the foundations for its international growth plans.
**Robert Louis Stevenson.
***Origin subject to differing views, but we will go with Dolly Parton for the purpose of this blog.