When thinking about building a business, many of us imagine future aspirations of growing into a multiple billion-dollar brand that grows exponentially.
Many of this growth is fueled by the international exposure that brands get which influence our decision to build a business globally.
According to American Express Global Business Travel, the top international destination for businesses was London, proving that not just Silicon Valley is the location where all entrepreneurs go for growth.
But there are many reasons why most companies fail with international growth efforts, and many of them are global competitors you all know. Here are 7 factors to consider before going global.
1. Are my customers global?
Customers are the lifeblood of a business. One of the biggest mistakes that businesses make when expanding globally is assuming that they have international customers when they may only have heard good things about the markets and the market potential.
This becomes increasingly important when you have limited resources as a startup, and must rely on customers as a source of growth in the international region.
The question I like to ask myself is "Will expansion globally help me fulfill customer demand in the region I am expanding to". If the answer is yes, then I know I am expanding because my customers need me.
2. Does my team agree that going global is necessary for growth?
Teams are the building blocks for successful ventures. For many companies, however, founders aren't the only decision makers in even operational decisions. Many of them include the founders as well as the shareholders.
Even during the early days, and later once the company has grown, the team becomes the most important factor in regards to beating the competition, even if they are much more established than your business.
3. Does my website communicate to my global customers?
Many websites demonstrate beautiful copy for regions they focus on, but when a non-English speaker tries to read your copy they get turned off because they can't read it!
Even though English is the most widely-spoken language in the world, the importance of having website pages communicate your message in the language that your customers are from is necessary.
In fact, most businesses achieve a much higher retention rate and opt-in rate on their websites if the language is focused on the group that you are attracting.
4. Do I have enough cash for unexpected issues?
Have you ever had the unexpected happen?
I have, and it's not pretty.
Especially when you are expanding into a new country, having enough cash for unexpected issues or concerns that are specific to that region is important.
For example, in India, many businesses bribe officials to get regulations and work completed in a timely fashion. Many times, however, businesses that are new to India don't understand this and fall into cash shortage, forcing them to close shop and exit this territory.
5. Do I have a local team on the ground that can help me?
Having locals who know the language and customs beats any expert who is in your home country.
The local teams are crucial for bringing a human element to conversations as well as negotiations that you will have.
6. Is my pricing suitable for the market I'm entering?
Pricing is one of the most finicky and frustrating aspects for many businesses.
For example, a bottle of water in the US costs about $3 in the streets of New York. However, a bottle in China costs about a third of the bottle in New York.
Similarly, if you price your product as the same pricing as the US, customers will get turned off.
7. Do I have an exit strategy?
Failure is bound to happen, but learning how to combat failure is what differentiates. good companies from great ones.
If you do end up expanding into a new territory, you need to know that there has to be a backup plan in case the business doesn't work out as planned. This is why having an exit strategy is imperative.