Top 5 Tips to Successful Expansion
Expanding into a new region offers tremendous opportunities for growth, increased revenues, new customers and international diversification.
However, if you are not fully prepared or committed, your expansion could prove costly. Even worse, if you aren't prepared to do business according to local practices, your expansion could fail and you may never be able to re-enter that market.
The following are the top 5 tips to successfully expanding into a new region:
1. Think Local
As the saying goes "We're not in Kansas anymore."
When you enter a new region, you are playing by new rules. If you want to succeed, you cannot expect to conduct business the same way you do at home. Every region has its own culture, business processes and practices. Local customers are not going to significantly change their behaviours just because you want to work a certain way.
A typical example of this are business meetings. North Americans are known for wanting to "get down to business". But other business cultures are not in the same kind of rush. They want to spend the first meeting (and possibly all of the second and third meetings) discussing economics, politics, culture, and so on.
They want to take the time to get to know you, before they are willing to discuss business with you.
Taking the time to consider how business is conducted locally, and adapting to that, is a critical first step in successfully entering a new region.
2. Think Long-Term
Closely related to the first tip, is making a commitment to the local region.
Customers want to see that you are not there to "just make a buck". Like any other customer around the world, they want to know that you will be there after the sale to service and support them.
They also want to see that you are serious about business. For that, they want to know you have a local office, local business licenses, local support staff, and that your senior executives are prepared to travel to meet face-to-face with them regularly.
Remember, you didn't develop the success in your home market overnight. You made commitments and invested time and effort to develop your reputation. The same is true for any new region you enter.
3. The Right Access
The expression "It's not What you know, but Who you know" is even more true in international markets.
Decision making outside of North America is often done at the highest levels in a company. If you don't know who these decision-makers are or don't get access to them, your sales process will be long and frustrating.
Further, knowing how to access high-level decision-makers is a skill in itself. You often need to be introduced or referred to them by the right contact (who is typically another successful, local decision-maker).
The value of getting into this group of decision-makers is obvious. And once you are in, you get preferred access to more business.
4. Learn The Bureaucracy
Red-tape and bureaucracy are everywhere around the world. It's just different.
Taking the time to learn the local government and business processes goes a long way to accelerating your success in a new region. And every country, region and municipality have their own set of laws, licenses and bureaucracy that you need to follow.
For example, many regions in the Middle East require corporate registration through a local sponsor, except if you are in a Free Zone. But the costs of being in a Free Zone are significantly higher than regular registration and there are restrictions for conducting business.
Another example is applying for a local phone number. To get one, you need to have a business address and office lease. To get an office lease, you need to have a local bank account. To get a local bank account, you need your residency papers. But to get your residency papers, you need a local phone number...
5. Business Definitions
While English is the language of international commerce, the interpretation of the English language can be very different.
The definition of industry terms and services can often appear to be intuitive and universal. But that's not always the case.
Knowing, for example, that certain services in North America do not include external suppliers or costs can be taken for granted when signing a contract with an international customer. It can then become surprising and embarrassing to discover that in the local region, those external suppliers and costs are expected to be included in the overall price.
You can dispute this, but remember tip number 1 and tip number 4: you are doing business in a new region and playing by their rules. You also don't want an upset customer.
Knowing what constitutes standard, local business terms and definitions ensures you avoid these problems upfront.
The Next 10 Tips
Knowing and following the above tips will make your entrance into a new region significantly faster, easier and more profitable.
But they are just the beginning. There are other critical tips you need to know before you invest time, resources and money on your international expansion strategy.
At Tactical Connections, we are experts at international business development. We live it every day. We can fast-track your expansion plans and international success.
Contact us to learn about the other 10 tips to successfully expanding in a new region, and how we can help you.
When you're ready to grow – we get you there.
