Many entrepreneurs find it easier to start a business than to grow it. Inception has its own challenges, but when it comes to expansion into new markets, the going becomes tougher. As such, several businesses tend to restrict their operations within a local zone that they understand better.
However, technological advances are now helping business people to overcome some of the challenges that they face when trying to grow their businesses beyond borders. Challenges like lacking a clear understanding of foreign markets, difficulties in securing premises for branch offices, and hiring the right candidates for the positions open can now be addressed at manageable costs.
Business growth tips
Many businesses struggle after expansion mainly because of failing to do their research properly. Some expand too much, too soon, while others venture into the wrong markets. As such, research is crucial.
- Make sure you understand the target market: Simple things such as culture, taxation policies, and competing products can determine whether the expansion to a foreign market will work in favor of, or against a business. As such, it is imperative that you do proper research on products that are prohibited in the market that you target. Also, check the alternative products on offer and whether the taxation policies are conducive to foreign businesses.
- Get a flexible office space: Even after doing thorough research on the target market, it is still difficult to predict what will happen once you launch your brand in the new market. Things could get tough early on prompting you to downsize your workforce to cut costs. In this case, having a flexible office space can help to adjust to the changes quicker. Global office space brokerages like London Office Space provide businesses with limitless office solutions that suit their needs. This is a clear indication that in the modern business environment, technology and flexible business solutions are the future.
- Get a local hiring agency to find the right staff: Some businesses can find it difficult to find the right staff for the new job openings. Some might try to hire staff after establishing a presence on the ground. This process is tiresome, expensive, and unnecessary. The easiest thing to do would be to find a hiring agent who can vet those short-listed for the available positions. If the business owner needs to be involved, they can do so via video conferencing platforms like Zoom, which have recently been a revelation amid the coronavirus pandemic.
- Partner with a local business in the target market: This strategy is one of the most popular and easiest ways of gaining access to a foreign market. The benefits of using this option include taxation and ease of penetration. Some markets have very restrictive policies against foreign companies looking to launch their products in the market. This happens especially where there are competing products locally and the government has implemented protective measures on local entrepreneurship. Partnering with a local business also expedites the penetration of your products because the local business already understands the market in-depth.
- Balance debt and equity financing: It is unwise to finance your expansion solely on debt. While debt can provide the capital boost required to set a new branch abroad, it can also work against your business when the products launched in the new market fail to hit the ground running. Soon, it could become difficult to service the debt, which could push you to shut the expansion.
In summary, businesses are increasingly expanding their operations globally. This is no longer reserved for large multinational corporations. Even some of the most disruptive startups with annual revenues of less than $1 million have direct access to multinational markets.
Some utilize technology to launch their products in new markets while others are still traditional in their approach. The tips discussed here can help small businesses launch their products in foreign markets.