In last week’s post, Why Expanding into International Markets Is Not a Crazy Idea (Part 1), I talked about why I believe that there has never been a better time to take your business to the world. I also outlined a few of the key reasons that companies should be looking abroad and considering how they can get a slice of the global pie, rather than just focussing on getting a larger slice of a domestic market.
This week, in Part 2 of the post, I want to talk about the three key international expansion challenges that you’ll face, as soon as you get out of your comfort zone and into a new market.
If you prefer to watch rather than read, check out the keynote that I gave at GrowthCon in Sydney.
Three Big Challenges to International Expansion
1. Not Enough Commercial Intelligence
Companies often don’t have enough information about what is going on in their target market, so they are guessing rather than researching thoroughly and they don’t have much of a strategy. They see an opportunity which looks good and they believe that they can succeed, without doing the groundwork to make sure that this is actually the case. And frequently, it doesn’t work out.
If you haven’t thoroughly assessed and understood what is going on in your target market – what the conditions are, how your product or service is likely to be received, who the competition is – and formulated a plan for dealing with the challenges that are likely to arise – regulatory hurdles, cost overruns, delays, challenges with staffing – then you’re potentially heading into a world of commercial pain and personal stress.
2. Not Enough Cultural Awareness
3. Not Enough Contacts
Lastly, people often don’t have enough contacts. Operating in a new market is not like operating in your home market. You don’t have friends and connections from school and university. You don’t have existing clients who you can ask for referrals and you may not even be sure about where to start looking for help. Lack of contacts is a simple problem, but one which can dramatically affect the success of a business venture in a new country.
Stay tuned for the third and final part of this series. I’ll be talking about the seven questions that you need to be able to answer before you take your business to a new market. Meantime, if you have a question about international expansion, please connect with me on LinkedIn.