International expansion could be the next step to grow your business after building a loyal national customer base. Becoming a global company is an impressive success, but not every business is prepared for this great challenge.
There are many things to think about before you sell your products or services abroad. Did you ask yourself if you have a potential customer base in the foreign markets you want to go to? A product that you successfully sell in your home country does not necessarily have the same response elsewhere.
It is not enough to think that your supply may be in demand abroad. You need to know.
For this reason, Michael Lee, head of international marketing and business development for the e-commerce platform Alibaba.com, recommends looking for markets that are as similar to yours as possible. For a smooth business deal, you should be sufficiently familiar with the way you trade in the target country. In addition, you have to take into account that the legislation and business environment will not be the same either.
The fewer differences between your country and the country you are exporting to, the easier it will be to trade.
Challenges of international trade
No major business decision is unobstructed, and international expansion also comes with its own unique set of problems.
Language and cultural barriers
We recommend gradually hiring staff who can speak multiple languages and can translate for your company.
Different cultural standards are another obstacle. It is important to explore cultural practices in the countries where you intend to expand. The needs of foreign customers and business partners are likely to differ from those of domestic entities.
Tax systems and compliance issues
Knowing the different tax, trade, and packaging standards in different countries can be challenging.
Packaging requirements vary from country to country. In Europe, the instructions, even for the simplest product, must be in several languages, sometimes as late as 24. Product safety is also declared differently in each country.
Different pace of contracting
In each country, business relations are built in a slightly different way.
Building relationships is a long-term commitment and national traditions are reflected in the way in which deals are made. Personal and professional influences enter into contracts as much. Building trust is a lengthy process in some locations.
In pragmatic cultures, a clear assessment of supply will occur very quickly after the relationship has been established. In some other countries, it is common to meet with your business partner informally several times before discussing your offer at all.
Building relationships is in any case a long-term matter. You need to be patient and ready for multiple interactions in building business relationships.
It is not easy to persuade a foreign customer to trust your brand when a similar product is manufactured in their home country. Small and medium-sized companies spend a lot of energy on convincing the international market that their brands are trustworthy and better than their competitors.
Why would foreign customers prefer to buy from you rather than a local champion? What concessions? If so, can you still be profitable under the circumstances? "
Advice and best practices
If you feel you are ready to deal with the challenges of international trade, follow the advice and instructions from those in the same situation before you
Find the right partners and team.
If you're planning a global expansion, you'll want a great team and partner abroad. Even if your "partner" is just a mentor, you will want to have someone you trust and who can guarantee for you.
You need someone who has a passion for your brand, understands the local market, has experience, has the capital to grow, and ideally has other businesses that can be used as shared resources.
Without a basic team with the necessary cultural and language skills and no local business contacts, you will be competitive disadvantaged.
Consider the impact of each new idea.
Instead of just thinking about how to introduce your new ideas to customers in your country, you will have to think about how to make your new ideas available in that country abroad.
Stay consistent in promoting your brand, but adapt to the environment.
Different cultural standards and the needs of customers abroad may require you to customize your sales approach or even your entire product. In any case, your offer must match the local taste.
Take proper care of each country you want to expand to.
You should think through all possible scenarios before making a major business decision. It is a good idea to personally travel for a longer period of time to the country or countries you want to expand to get a first-hand idea of how your business in a foreign country can work.
Traveling to these countries will give you the opportunity to do research on the spot and see how your product will be perceived in a foreign market.
Do everything possible to understand the markets you are entering. Spend enough time traveling to understand future markets properly.