Shifting from local to global has become a hot trend now. Overseas expansion is getting more and more popularity across the globe. It is one of the best ways to ensure that your business gets a consistent scaling opportunity.
However, most SMEs don’t have extensive knowledge of overseas expansion and how to get started with it. We understand that the concept of global expansion can be overwhelming, especially for startups. That’s exactly why we are here to help.
This blog will break down the concept of overseas expansion, its benefits, and the possible mistakes you should avoid while expanding your business in the international markets.
So let’s dive in!
Why does Overseas Expansion Matter for your Business?
The global business ecosystem is filled with cut-throat competition. Thanks to globalization, there is a lesser barrier to entry. Hence, businesses with little experience are also planning to make it big in the international markets.
The question that pertains here is why overseas expansion is even important? Here is why:
- Significant savings in operational costs
- High scaling up the opportunity with massive sales expansion
- Creation of a diversified clientele
- Ability to access a vast talent pool
Now that you know the major reasons behind the overseas expansion let’s get to some tips and strategies to improve your overseas expansion experience.
5 Tips for Overseas Expansion for SMEs
Small business owners mostly focus on growing in their domestic markets. Now, we are not saying that’s a mistake but this may mean that you are missing out on some massive growth opportunities.
Did you know that 90% of the global business population represents SMEs? Clearly, SMEs have a large contribution to global economic growth. So, why not plan on grabbing these opportunities.
Here are some essential tips to help you with global expansion:
1. Do your research in advance
Before entering the overseas scenario, it is mandatory to do some homework on your own. By “homework” we mean understanding the market better. Since you’re going to a new and unknown market, it is always a good idea to do a fundamental research.
Here are some questions that you must find answers to, for the overseas expansion research:
- Who are the target customers? What are they like?
- What are the cultural factors that can influence the market dynamics?
- Who are the competitors?
- What are the competitors offering? Where is the gap between their solutions and customers’ expectations?
- How can you do things differently to meet customers’ demand?
You must move ahead only if the answers to these questions are in your favor. If your competitors are already ruling the overseas market and their solutions are strong enough, there’s no point in targeting the same market.
For instance, Starbucks, the global coffee chain, couldn’t make it big in the Australian market. The reason being strong local competitors who gave this US coffee brand a tough competition.
2. Create an overseas expansion plan
Suppose, your overseas expansion research is over and you have all the information you need. What next? Well, now it’s time to put all those information together to create an overseas expansion plan.
Here are some pointers to include in this plan:
- What are your primary and secondary goals behind this overseas expansion?
- Which pain point of the target market will you target?
- Which products/solutions will be the perfect fit to address these pain points?
- Which technologies will you leverage?
- Which languages do you need to learn?
- What are your plans to build a workforce?
Include all these pointers (and more if required) to your overseas expansion plan before attempting to shift internationally.
3. List out the potential roadblocks
Will there be roadblocks in your path of global expansion? Of course! Overseas expansion is not going to be all bed of roses. A lot of things will go wrong in your overseas expansion journey. So, the smarter way to handle it is through identifying the potential roadblocks in advance and staying prepared.
For instance, language problems can worsen things a lot. If you don’t know the language of your overseas market, you can hardly interact with your target customers, new employees, partners and investors. Hence, language can be a roadblock.
Now this was just one example. Language may or may not be a roadblock in your case. But there can be other backlogs too. Make a list of those and start working on them.
4. Build a dedicated workforce
Planning to expand globally? Don’t forget to expand your team too. Simplify your overseas expansion by forming a diverse team. Leveraging on domestic talents is not always the right choice. One of the biggest advantages of overseas expansion is, accessing a global talent pool to build a flexible workforce.
Now, we know that overseas hiring and onboarding can be difficult. That’s exactly why you need a B2B SaaS platform like Multiplier. With Multiplier’s Employer of Record solution, you can do the following:
- Onboard international candidates and provide them with the appropriate payscale, perks and benefits
- Mitigate cross-border risks and generate employment contracts that are compliant with the local legislations
- Manage multi-currency payrolls and employ independent contractors and freelancers on the go
To know more, get your demo today!
5. Focus on networking
Spend some time in networking. Networking is all about building relationships and partnering with the right professionals/businesses to accelerate growth. Did you know that 8% of startups failed to make a mark because they didn’t focus on networking? Yes, networking and building a community is that powerful.
So, try to strengthen your network in the target overseas market, try to connect with local investors who can play a role in your growth. With a strong and supportive network, the growth potential is endless.
5 Mistakes to Avoid During Overseas Expansion
Overseas expansion is tricky. Evidently, new businesses may make some mistakes that can cost them big time. So, it’s good to know about these mistakes in advance, so that you can take the required steps.
Here are some common mistakes that most businesses make during overseas expansion:
1. Hurrying into overseas expansion
Not expanding overseas is a mistake. But a bigger mistake is hurrying into overseas expansion when your business is not prepared for it. So how do you know if your business is diving into global expansion too early?
Ask these questions to yourself and you’ll find out pretty soon:
- Has your business received the attention of any senior stakeholder yet?
- Have you considered looking into the product-market fit aspect?
- Do you have the budget to expand overseas?
Don’t jump in to overseas expansion without finding the answers to these questions.
2. Not thinking out-of-the-box and relying on the same old strategies
Most businesses get so comfortable with their good old marketing tactics, that they neglect thinking about out-of-the-box ideas. While focusing on tried-and-tested strategies is good, it is not always the best idea.
Different markets have different demands and accordingly, businesses should customize their strategies. Your overseas expansion strategies should be adaptable to the local customers and you must form them by keeping in mind about cultural and demographic factors of this market.
If you continue with the same old strategies and fail to localize them when needed, there can be a huge gap between your products and customers’ demands, that are hard to fill. So, try to think out-of-the-box.
3. Not spending enough on overseas expansion
Overseas expansions may need a lot of funding. For example, the level of investment required in the US is much higher than that in the European countries. Take the example of the Hailo app. This UK-based achieved a lot of growth in Europe and raised an investment of $77 million in 2013. But, when it moved to the US, it lasted less than 24 months.
This takes us back to the same conclusion. That is, jumping into overseas expansion is not the ideal thing to do. Make sure you have the right funding and the right set of opportunities before going in.
4. Not setting the right goals
Setting the proper overseas expansion goals is very important. If you decided to expand globally just because everyone else is doing so, you’re clearly not doing the right thing. Some businesses also consider overseas expansion as their quick ticket to get rich. But you need the right plan for that.
While setting your overseas expansion goals, find the answers to these questions:
- What are your financial goals from this expansion?
- Does your business have the operational stability to complete this overseas expansion?
- Do you have a workforce to help you out?
5. Not investing in onboarding overseas talent
Some businesses plan to expand overseas, but they have inhibitions when it comes to building a diverse team. They are scared to delegate and prefer relying on the same group of employees, even for overseas expansion.
It is high time for these businesses to realize that local professionals are properly aware of the market and they understand customers’ requirements better. So, if delegating completely is a challenge, at least mix domestic and overseas employees to ensure proper knowledge sharing.
3 Benefits of Overseas Expansion
Overseas expansion can provide you with a whole lot of opportunities in terms of upscaling. Here are some benefits of overseas expansion that businesses should know of:
1. Accessing the global talent pool
Overseas expansion can open doors to hiring new talents. Employees are the cornerstone of any organization. So, make sure that you are selecting the right people to join your team. Why limit your workforce to the domestic market, when you can access to the bigger global talent pool?
With the overseas expansion, businesses can come across many new potential employees with diverse skillsets. When you have more options, you can make a decision on which candidate will fit which role the best.
When Netflix entered The Netherlands, the OTT giant praised the country a lot. The brand was particularly happy about hiring a multilingual workforce who understood the cultural needs of the country better.
Sometimes, the addition of global talents can uplift the innovation level of an organization. This is the reason why many startups that failed in their domestic markets, have achieved tremendous success in international markets.
2. Getting international recognition
Overseas expansion can bring your brand a lot of international recognition. It is a like a once in a lifetime opportunity for brands to build a global brand image and get noticed. If you focus on building a global brand, it can fetch you new customers and ensure that existing customers are finding your brand to be more credible.
Here are somethings to keep in mind:
- Put all your concentration on understanding the market. This is helpful to gather a lot of local data that you can later capitalize to address the local market.
- Build a market strategy to introduce your brand to the new customers. Before building an audience, ensure that you are positioning your brand properly.
- Stay accessible for your potential customers with a powerful web and social media presence.
3. Staying a step ahead of competitors
If you get in the international market before your domestic competitors and win over the customers, nothing like it. This means, you’ll already achieve a competitive advantage in the international market, and this will accelerate your growth eventually.
This type of advantage is also known as the first-move advantage. It means you get first-hand access to international customers, employees and technologies over your competitors. This is HUGE!
Simplify Overseas Expansion with Multiplier
Are you planning to go global in 2022? Well, we can help you take care of overseas onboarding with a few clicks.
A SaaS onboarding platform that can help you achieve a seamless onboarding is – Multiplier. Here’s how it helps:
- It completes global onboarding within minutes
- It handles multi-currency global payrolls effortlessly
- It generates prompt, compliant employment/freelancer contracts
To explore further, schedule a free demo now!