Business can be addictive. In those first few years, you’ll be riding the wave of increased sales and exciting new opportunities but things will start to slow down after a while. There comes a point when you have tapped into almost all of the markets in the country and you might start to feel a bit lost as to where to go from here. Some people are content with this level of success and they are happy to carry on in the stable position that they’ve reached. For others, it just isn’t enough. If you’re hungry for more, you could consider expanding the business internationally. Widening your potential market is a great way to get new opportunities but it isn’t always plain sailing. Expanding into an international market has its benefits but there are potential issues as well. It all depends on the nature of the business and the people that are running it.
If you are looking for new challenges, this should help you to decide whether taking your business global is the right decision.
Brand Awareness
Brand awareness is one of the best ways to drive sales. Advertising isn’t about somebody seeing a billboard and immediately deciding to buy the product, it’s about making sure that your brand comes to mind first when they decide to buy products themselves. Some brands, like Coca Cola or Mcdonalds, are known to everybody all around the world and that is how they have established themselves as market leaders. Your business can reap the same benefits if you expand globally because not only will your brand be known locally, it will be recognized across the globe. Wider brand awareness will make it easier to break new markets in the future.
Increased Sales
I think it’s pretty obvious that sales will increase if you expand globally. You open yourself up to millions of new potential customers so it is likely you’ll move product. Unfortunately, it isn’t quite as simple as that; the cost of expanding will be large and you aren’t guaranteed to see success in these new markets, but the potential is still there.
Less Competition
Contrary to popular belief, expanding internationally doesn’t mean that there is more competition. In fact, there is usually less. People are drawn towards large international companies rather than smaller local ones, so moving into a new country is likely to push a lot of these businesses out and reduce your competition.
You Can Delegate
When you’re running a business in just one country, the likelihood is that you’ll be dealing with everything yourself. People are often put off expanding globally because they think it means multiplying their workload by however many countries they are moving into. While your workload will increase quite a bit, it won’t be as much as you might think. You can delegate a lot of the organization to other people. Shipping container transport companies will deal with all of the logistics for you, and you can partner with overseas distribution companies which can oversee the sale of products on your behalf.
The Business Is Safer
When you are selling to one market, you’re at risk of changing trends. Consumers can be fickle and if your products fall out of style then you could experience a drop in sales. By expanding your market into other countries, you can protect yourself from this to some extent. Just because something isn’t popular at home anymore, it doesn’t mean that you won’t be able to sell it elsewhere.
While you will see these benefits if you expand internationally, you should also be aware of the negatives.
Time Zones
Trying to navigate time zones is a bit of a nightmare. It isn’t so much of a problem if you are only dealing with one other country, it might just mean having to get up in the middle of the night to make calls. When you’re dealing with lots of different countries that are all in separate times zones, you’re going to run into trouble. Trying to coordinate all of the arms of your business can be a struggle but it is possible. You just need to work out a time that is the most practical for all of you, but some of you will need to make sacrifices.
Language
Language is another huge barrier between countries. Not being able to understand one another properly is going to make negotiations especially troublesome. Even if you speak their language a little bit, complex business discussions will be hard to get off the ground. This means that you are going to have to pay an interpreter. When you are deciding on places to expand into, why not look at countries that have a high number of English speaking people there? It will make things a lot smoother and you don’t want to put more problems on your plate when you’re already facing the challenge of expanding the business.
Knowing Your Market
When you’re trying to plan a marketing campaign, understanding the culture of the area is important. When you are doing business in your home country, you’ll know what makes people tick. Arriving in a new country and trying to put the same marketing tactics in place isn’t likely to work. Trying to handle the marketing yourself isn’t a smart move, it’s much better to partner with a local company who will be better equipped to market to the local area.
Currency Fluctuations
One of the biggest hurdles that global companies face is the fluctuations in exchange rates. It can cause serious issues and in some cases, loss of profits. If the value of a currency drops rapidly, those profits that you thought you had will be gone immediately. Another problem that businesses often find is that they have to pay fees when exchanging currency. If you are working in a lot of different countries, these fees can soon add up to quite a considerable amount. If you are making enough money to cover it and still turn a profit then you’re fine, but if sales are dwindling, you could end up not making much at all.