3 Tips for Global Business Expansion - 5 minutes read
Opinions expressed by Entrepreneur contributors are their own.
Regardless of the timeline for your business, it's essential to plan for the future. Focusing only on the present without ambitious goals is a recipe for failure. Once a startup is established in the local market, it is time to move on to international expansion. And for this, you need a clear road map.
Harvard Business Review's study on the role of business planning in startup success revealed that founders with a business plan for expansion were 16% more likely to achieve viability than those without a plan. Entrepreneurs focused on startup are 7% more likely to plan with forward-thinking ideas.
More than 60% of scaling efforts can succeed. This impressive fact attracts investors who are more willing to invest in the projects of founders who understand that real value comes from being able to boost startups and scale them globally.
While the Internet is full of articles to help you create a business plan, I want to share some essential tips on planning international expansion. I came up with them from my experience expanding my company into the Philippines and India. This knowledge will help you grow faster, more efficiently and without financial losses.
Entrepreneurs make the mistake of thinking the biggest challenge in expansion is competition. In reality, only 20% of startups fail because of getting outcompeted.
Our experience has shown that the primary opponent in a new market is the external market environment and uncertainty. When planning, you should always count on a worst-case scenario and an unfriendly environment.
Use these three practical exercises not to make too optimistic forecasts.
Long-term planning. While planning results and activities for the year, stop and think about how each aspect of your plan might not work. Have a brainstorm with your team and don't be afraid to discard ideas.
For instance, we made a mistake at one time of relying on the rapidity of hiring sales managers in new markets. We expected it to take 3-4 weeks, but it took longer. We needed to consider the time for training, adaptation and employee needs.
Related: How to Know When to Hire an International Team
Short-term planning. When planning weekly checkpoints or sprints, compare expectations and reality. Don't chase steep and big goals by laying down unrealistic deadlines. The truth would be painful. In short-term planning, the most helpful question is: "what are we not doing now?" We discuss with our team what we won't do each week, why we've put it off and what we're doing instead.
When the planning is done. When you've developed a plan and done a "what can go wrong" exercise, involve external authoritative experts in a similar practice. Show the completed project to experts and let them challenge it. At our company, we ask our investors to look at our plan and assess the risks. This helps us evaluate our options and helps us not to waste money, employee resources and time.
In a startup, teams depend on each other. This affects the performance of the enterprise as a whole. You, as an entrepreneur, must clearly understand how these connections function. If one element falls out, the whole system collapses. For example, a new contract with a partner might get delayed for several weeks just because the necessary document got lost in transition.
We faced this problem ourselves. An employee of our business development department dropped out for two weeks. Without him, we couldn't get the right contact for payments and weren't able to quickly solve the customer's problems.
How could this situation have been prevented? Consider team relationships in the planning stage. Discuss who has access to accounts. Plan around employee needs and avoid a situation where something strategically important is left with one employee.
I suggest structuring your database with internal information and adding a company rule of creating critical process manual documents, access guidebooks, passwords and contacts. This protects you from the risk of a total stoppage.
Hiring people internationally is a critical and challenging process. After all, your performance depends on your staff, and it's crucial to learn how to look for talent thousands of kilometers away.
To make the talent search and hiring process successful, I suggest consulting with experts in the global market. Individual request consulting is expensive, but every dollar pays off.
Networking with other founders also works. Ask them about the peculiarities of the local mentality, frequent mistakes of foreign hiring companies, the average salary level and the importance of the HR brand for candidates. Specify the little things - from the candidate's preferred language to slang of address.
When you get the answers to these questions, be careful about predicting the number of people you'll hire over any given period.
I faced this issue when my company expanded into the Philippines and Indonesia. We did not know how to hire salespeople quickly. In the first few months, we made less revenue than we could have. We quickly realized we had not planned our hiring process as well as we should have.
Proper planning is the key to successful expansion and business development. However, over-optimism in planning leads to unnecessary costs and problems. Always anticipate the worst-case scenario, plan your hiring in as much detail as possible and give your plan to investors to ensure you are following the right path for success.
Powered by NewsAPI.org