International expansion is a lucrative market for entrepreneurs to consider - with the potential to significantly improve revenue and fundraising opportunities. However, as we have explored previously in our 7 Deadly Sins of US Market Entry, succeeding internationally is not an easy venture and takes careful planning and consideration
It is important for any entrepreneur to understand what the impact is going to be on daily operations and if the rewards actually outweigh the risks.
Faced with the challenge of market entry companies often consider one of two strategies:
- “Hire a sales guy”
- “Find a partner”
Unfortunately, neither of these approaches work in the early stages of market entry. Worse, it usually takes a lot of time and money for entrepreneurs to learn that lesson. Expansion is expensive, time is money and companies often burn hundreds of thousands of dollars over many months pursuing a “dead-end” strategy.
So where do you start? This article will go through the six steps you need to make to ensure your startup is ready for expanding your business internationally.
1. Assess your readiness
The first thing you need to do is ask yourself: Is my company ready for such a move? Expanding a company comes with its own risks, which is why you need to conduct an analysis of your team and resources:
- Make sure your finances are plenty enough to maintain operations in another country - Companies tend to underestimate the economic burden of expanding their operations. Keep in mind that you could spend 18-24 months funding the whole process until you start to see revenue.
- Analyze your company’s capabilities - Knowing your strengths and weaknesses is a good indicator of whether you should go international or not. For example, is your company meeting its current goals? If not, then you should postpone your expansion until your business is meeting its goals.
- Analyze your product/service for readiness - Ensure there’s a need that you could satisfy in that market, trademark your goods, and comply with all the local regulations required to operate correctly.
2. Make sure everyone is on board with the expansion
Your team will be the backbone of your expansion; this is why it’s fundamental that they agree with the idea and share the same vision as the founders and stakeholders.
For the expansion to be successful, you need to set up a “beachhead” with the essential personnel to lead this adventure. For this to happen, everyone on your team, and that includes your family, has to be on board with the idea as well as comply with all the legal requirements to move to the destination.
3. Conduct a deep-dive market research
It is critical to understand everything about the new market you are about to enter. Each industry has its own characteristics, which is why you might want to focus on one ICP whilst you get a glimpse of the impact that your product will have and how you’ll benefit. This include:
- Research economic, cultural, governmental and regulations;
- Consider the market size, trend and growth rate to determine how long it will take before you see a return on your investment;
- Prepare a market segmentation analysis to determine where your product/service will fit in the local market;
- Prepare product gap analysis against local products. Are you going to need to invest your product to be competitive?
- Spend the time to prepare a detailed competitive analysis on all areas e.g. Pricing, Marketing, Product, Messaging.
4. Establish your business model & go-to-market strategy
To sell and market your product properly, you need to have a clear and comprehensive strategy to determine how you will differentiate yourself. Whilst it is important to think like a local, you must also stay aligned to your home country's corporate goals and objectives to retain brand identity.
The most basic aspects you should address in your strategy:
- Define your expansion SMART Goals - long and short term;
- Review your business model - we suggest using the Lean Canvas Model;
- Define your target audience - We recommend when entering a new market that you narrow it down to one ICP and one product/service;
- Define your distribution model - How will the product or service be delivered to the customer?
- Prepare your product messaging and positioning - What is being sold and what is its unique value proposition? We also love creating a WOW! Statement - a simple, crisp and easy way to explain what your business does.
- Evaluate your revenue and pricing model - What kind of revenue model and what level of pricing do we anticipate will be competitive and successful in the marketplace?
5. Leverage influencer and network relationships in a foreign market
Look for influencers in the markets you’re interested in and develop a relationship with them well before you begin expansion. These “customer discovery” meetings are great to help turn assumptions into “hard” facts and adapt the go-to-market approach as needed.
These are not sales meetings. The primary goal of these meetings is learning: to test the key assumptions around your business and gain insights about how best to internationalize your company.
Who you know is all part of the game and these “Sanity Checks” may even develop into a partnership or you may even gain a mentor to help guide you through the industry and new market.
6. Test the waters
Testing concepts is always a good idea, especially before undertaking a massive action such as international expansion. With the ease of global connectedness due to technology, it is a lot easier to begin to test the waters in your home country and build your initial offer to your ICP.
- Website adaptation guidance: you may need to make changes and will almost definitely need to have a US-specific website that reflects the US positioning;
- Create a US landing page and drive campaigns targeted towards your ICP;
- Adapt all collateral to be in the local language;
- Create a video explainer demo that can easily showcase what you do;
- Create Case Studies - even better if you have a client already in the local market;
- Build out initial network list.
And last but not least, don’t be afraid to change and adapt your strategies. Trial and error are standard practices and an ideal way to know something works in a particular market. Remember, what worked for you in your country, may not do so in other latitudes because of different cultures, habits, or a changing ecosystem. Adapting your efforts to the new market will allow you to maintain your expansion until you reach your goal.
If you're able to implement all these steps, your business expansion will be easier to handle and will lead you to more and unique growth opportunities at a steady pace.
