As Thomas Friedman pointed out in his 2005 book, “The World is Flat,” it’s become increasingly simpler to communicate and do business on a global scale. That came out in 2005 – a decade ago – and the world has only gotten flatter. It’s as easy as it’s ever been to establish a global organization, but that doesn’t mean any company should just rush in headfirst without adequate preparation. Like anything else, successful businesses will examine their options, test the market, create a plan and do a little soul-searching before their first foray into a foreign marketplace. Here are a few ways your company can determine whether or not it’s ready to look toward new horizons.
1. Do you have the capital to sustain a temporary hit?
You have to spend money to make money, but not if it puts you at risk of bankruptcy. There’s inherent risk in any expansion effort, but the key is to calculate how much money you can devote to the move while still covering all the necessary overheads. That’s why it makes sense to take it slow – don’t open up shop in 10 places at once unless you’re absolutely certain you can afford it. In other words, you want to take one step backward and two (or three) steps forward – not two steps backward and one step forward.
2. Have you identified a market for your product or service?
Don’t go into any global endeavor blindfolded – determine whether there is actually any demand for the things you provide. Perhaps you routinely receive inquiries from a particular region or country, or maybe you know someone in another country who’s told you how your business could work in that area. Be proactive and perform the necessary research to find out if you will find success abroad, and then exactly where.
“Don’t be goaded into going global just because your competitors haven’t.”
3. Do you have the tools to send your goods abroad? Would you need to open a new office?
Once you’ve figured out where your company can find success, you must also consider how you’ll send your goods or services over there. If you sell a physical product, maybe you decide to simply focus on shipping to distributors in your target region. But it may also make more sense to have a presence in that area to show the consumer base you’re serious about providing business. You can also employ locals, which will ingratiate you with clientele. Once again, this additional cost must be factored in when you examine your finances.
4. What are your competitors doing?
This last one is tricky. If none of them have established a global brand, that could mean there’s an opening for you step in and fill. However, don’t be goaded into going global just because your competitors haven’t – it could be they’ve looked into it and found it wasn’t worth it. Conversely, don’t be tempted into keeping up with the Joneses if all of them have well-established global footprints if your company is truly not prepared to make that leap. Focus on your consumer base at home and build over time until you can make a successful foray into the international markets.
So in summary, should your business go global? If you can answer these questions affirmatively, the answer is yes. So long as you satisfy these criteria, you would be foolish not to expand internationally. With competition increasing and interconnectedness growing, you can go toe-to-toe with any of your rivals by cornering a region they haven’t yet explored. It’s one of the ways small businesses can stand up to their larger, better-funded rivals.
- 5 Reasons Why Cloud Solutions are Essential for Small Business - February 4, 2024
- How to Migrate Your Business to the Cloud in 7 Steps - June 16, 2021
- How Beacon Technology is Revolutionizing Business and Marketing - March 18, 2021