Don't be the elephant in the porcelain shop when scaling your business across borders. Here's an extensive guide with everything you need to plan ahead.
Scaling internationally is exciting on paper, but it’s not a rosy process. You’re going to hate having had the idea in the first place, at one point or another. That’s a given. Doesn’t mean it’s not worth it.
You need to be rigorous and follow this order:
- Research the Market
- Adapt Your Product
- Develop a Business plan
- Set a Budget
- Secure Funding
- Launch Your Product & Monitor Progress
Let's get into it, shall we?
Research the Market
Start by conducting market research to identify potential countries and markets for your business. Consider factors such as culture, language, regulations, and competition.
You don’t think hiring a competent, native market analyst is worth it? Well, obviously you’ve never heard of KFC kicking off its "finger licking good" campaign in China with an erroneous translation, which read "eat your fingers off."
Or when the company Coors translated their slogan "Turn It Loose" into Spanish, which, unfortunately, turned out to be a colloquial term for diarrhoea.
These are rare, silly examples to kick us off, but they symbolise a bigger trend of thought.
Scaling up internationally is not just about settling across a large body of water, but it requires an ocean of preparation too, even towards silly, unassuming things
Cultural Differences
Cultural differences can have a significant impact on how your product or service is received in the international market. Look out for differences in communication styles, consumer behaviour, and social norms.
Your product might be a hit domestically, but get little to no traction somewhere else.
Regulatory and Legal Environment
Regulations and laws vary greatly between countries: from import/export restrictions to product labelling requirements. You need to be aware of the legal and regulatory environment in each target market, and how it can influence your process.
It’s good to know employment laws too.
Some countries offer competitive regulatory frameworks in that matter, while some are awfully complicated/disadvantageous for employers. (Hi, France!)
Competitive Landscape
Researching your competition in the target market is crucial to identify potential challenges and opportunities. Look out for local players who may have an advantage in the market. Learn about why they have success, but also identify, and learn from, their mistakes.
Language / Localization
Consider the language and cultural preferences of your target market. Look out for any potential language barriers and consider adapting your product or service to the local culture.
There's a difference between a translation and localization... You want to run most of your marketing/branding through localisation experts.
Don't repeat the mistakes we talked about in the intro!
Logistics and Infrastructure
The logistics and infrastructure in the target market can impact all sorts of aspects of production and distribution: from shipping to supply chain management.
Look out for any potential logistical challenges and consider partnering with local suppliers or distributors.
Intellectual Property Protection
Intellectual property protection can vary between countries and can impact everything from patent protection to copyright laws. Be aware of the intellectual property landscape in each target market.
You will need to think about IP protection while making your expansion budget.
Consumer Feedback
Consider gathering feedback from local consumers through surveys, focus groups, or social media. This can help you identify potential issues and opportunities for improvement.
This can be done before your product launch, as well as immediately after.
Political Stability
Political instability can impact the success of your international expansion. Look out for any potential political risks, such as civil unrest or potential changes in government policies (upcoming elections).
Local Partnerships
Consider partnering with local companies or individuals who have expertise and connections in the target market. This can help you navigate the local business landscape and build trust with local consumers.
Adapt Your Product
To meet the needs and preferences of the international market, you may need to adapt particularities of the presentation/components of your product. This may include changes to packaging, labelling, and features.
Develop an International Business Plan
Your business plan should include an analysis of the market, a strategy for entering the market, financial projections, and a plan for managing operations and logistics. You’ve been through market research and must apply what you learn from it.
- Start by defining your business objectives for expanding internationally. Identify what you hope to achieve, such as increased revenue or market share, and how you plan to measure success.
- Identify your competitive advantage and determine what sets your product or service apart from the competition in the target markets. Identify your unique selling proposition (USP) and how it will appeal to consumers in the target market.
- Based on your research, develop a strategy for entering the target market. Consider factors such as pricing, distribution, marketing, and sales channels.
- Develop financial projections for your international expansion. Consider factors such as startup costs, marketing expenses, and revenue forecasts. Be realistic in your projections and consider potential risks and challenges.
- Consider how you will manage operations and logistics in the target market. Identify any potential challenges, such as shipping or customs regulations, and plan accordingly.
- Consider partnering with local companies or individuals who have expertise and connections in the target market. This can help you navigate the local business landscape and build trust with local consumers. Your management team will probably need a local too.
- Consult with legal experts to ensure that you comply with local laws and regulations.
Would be nice if it was that easy...
Setting a Budget
Now that you have a good idea of your business plan, you’ll be able to set a budget. This is crucial towards securing the funds you’ll most probably need to raise for conducting this international scale.
Your international expansion budget must include:
- IP protection
- People
- Sales & Marketing:
- Customer Success
- Tax, insurance and indirect costs
- Travel
- Legal costs
- Ongoing capital and operations costs
Secure Funding
Scaling a business internationally can require significant financial resources. You may need to secure funding through loans, investors, or grants to cover costs such as legal fees, marketing, and operations.
You can benefit from Cross Border Funding when required, check out our blog post: What is Cross Border Funding and How Can it Benefit Your Business?
With the expansion of alternative finance and the rise of private debt funds, there’s a huge range of finance options for businesses that want to scale up internationally. Here are some points you need to consider:
- What is the cost of financing?
- What are the tax structures?
- What is the new market legal system like?
- What government demands are there on local staffing?
- Are there financial advice and cross-market banking opportunities?
- What is the right funding mix: Debt? Debt + Equity? Other?
Funds usually hate you asking for £2m if your business plan shows that the scale would only require £1m. Don't make the mistake to ask for more than what you need. It'll just come off as irresponsible, and will raise eyebrows.
That's why it's so important to spend time modelling your financials.
Getting an accurate financial model that will pass the eye test is not as easy as it may seem. That's why you might want to talk to an advisor, who can help you build your case.
Launch Your Product & Monitor Progress
You should have all the means necessary to launch your product, but for the first few days and weeks, it's crucial to keep an eye on the feedback.
Conclusion
Props to anyone who went through all of this, without needing an aspirin.
As you've seen, how to successfully scale a business across borders requires a lot of work and painstaking preparations.
If you require any extra help, especially about the budget setting, and funding, you can talk to one of our advisors.
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