Every entrepreneur’s goal is to start a business and expand it beyond local borders. By expanding your business beyond your own shores, you’re able to access new, exciting markets, gain a competitive edge over your opponents, create a better brand image, and generate more revenue. Additionally, you get to access a much broader pool of talent, diversify your investments, and protect your bottom line from market disruptions.
However, it’s important to note that expanding into a foreign market requires a thought-out strategy, as it’s never an easy endeavor. First, you must take the time to assess your strengths and weaknesses to determine whether or not you’re ready to enter a foreign market. If you haven’t built a strong foundation locally—and aren’t consistently hitting your targets for the domestic market—don’t even think of expanding just yet.
You should consider entering a foreign market only after you’ve built a successful business model locally, outgrown your local borders, and mastered the art of competitive pricing. It’s also important that you conduct market research to determine if there’s a market demand for your products or service in the foreign market. With that in mind, here are five tips for entering a foreign market.
Research local customs, cultural expectations, and business etiquette
You may have built a strong customer base in your domestic market, but that doesn’t mean you’ll automatically do the same in an offshore market. Keep in mind that customs, business etiquette, and cultural expectations vary from country to country. As such, business success in a foreign market is only possible for companies that understand the etiquette of conducting business in that specific market.
It’s not uncommon for entrepreneurs to lose important deals or partnerships due to a lack of awareness about the etiquette, customs, or culture of a foreign associate. Educating yourself on the customs, culture, and business etiquette of another country will help you behave and do business in a respectful manner, which is very important when it comes to forging business partnerships and building customer relationships. Besides, learning about foreign customs and cultures can be fun and exciting.
Educate yourself on the local laws and regulation guidelines
One of the challenges that come with expanding into foreign markets is legal and regulatory barriers. Much like when you started your company or launched your first product in your current location, the new foreign market requires you to register the business and conduct your operations within the local laws and regulatory guidelines.
So, it’s important that you take the time to understand the legal climate in the foreign market you’re targeting. Consider working with a legal expert who can help you understand the country’s laws governing international business operations, immigration, and employment. An experienced legal professional will also help you understand all contract terminology and provisions. Other important considerations include your tax obligations in the foreign country, intellectual property and trademark protection, and protection policies for businesses.
Hire employees who understand the foreign market you’re targeting
If you’ve ever traveled beyond your local borders, you know that even neighboring countries or even states can vary wildly in terms of their traditions, cultures, and customers. One way to overcome the challenge of cultural differences in a foreign market is to hire employees who understand the people who live in that country or community and what they value.
You want to hire highly competent, intelligent local people who understand the foreign culture and customs, as they’ll be a helpful resource in your overall marketing strategy. Plus, it’ll be much easier to establish and maintain customer relationships when you have local teams that understand the target market.
Be sure to learn about local tax laws and your legal obligations towards your employees, if you’re planning to hire from that country. Many companies use professional translation services to overcome language barriers when assessing international employees in their hiring process.
Look at your competition in the foreign market you’re targeting
Chances are you’re not the first company to enter this territory. So, do your research and find out who your potential competitors are, how they approached the new market, what obstacles they might have faced in the past, and what they’re currently offering. If they’re still new in this market, find out what could be driving their success and what opportunities they could be missing out on. Your goal should be to learn everything you can about your potential opponents and exploit any gaps in the market so you can be better than them. Focus on innovating not imitating.
Research your new market
You’ve probably read about companies that didn’t find much success in foreign markets due to lack of or inadequate market research. For you to succeed in a new market, you must tailor your brand message and business to fit the preferences, desires, and needs of the consumers in that particular market. Therefore, the importance of market research cannot be overstated.
If you notice that your current products or services won’t fulfill the needs and desires of the consumers in the new market, consider altering your offering to fit the new market. Or just don’t sell in that market.