Navigating the unchartered territory of international expansion can be tricky for any business. Taking your business to an overseas market can pose unique challenges. Yet international expansion is key to the growth of many small businesses. So how do you take your business or product global without risking it all?
OFX CEO Malcolm Skander says setting the groundwork with local experts can help you achieve success when taking your business to a new market. Skander should know, OFX has more than 20 years experience as a global funds transfer service, providing foreign exchange to over 190 countries.
Get a local hero
Speaking at the Go Global workshop hosted by Ross Greenwood, Skander said it’s important to hire strong leaders in each market who can help you understand the local nuances, customer concerns and who are truly vested in your company.
“Every new market has a compounding complexity, from a new supply chain, new regulations, new people and new cultural nuances.”
“Quite early on you want to be looking for who’s going to be your person in Hong Kong, in San Francisco and so on. Having insight into what’s happening on the ground is invaluable to understanding local context.”
It’s important to not rush this process either. Take the time to assess the local structures that support your business, product, employee retention and policy.
What’s your purpose?
When you’re competing in a crowded overseas market, discovering a way to stand out can be difficult. Turn to your brand story and purpose to understand why consumers should care about your product.
Sarah Hamilton, co-founder & CEO of Sand & Sky, says having a purposeful and consistent brand proposition that answers “What is your brand story? Why do we care about it? And why should others?” is vital from the start.
“We concentrated on building our brand and the rest fell into place,” Hamiliton said.
Small businesses can also be particularly vulnerable to launching in new markets before they are ready. To avoid this, Dearin & Associates’ Cynthia Dearin stresses the importance of getting clarity on your reason for going overseas; is it to help decrease production costs? Will it give you a base closer to a key market? Do you want to take advantage of favourable market conditions?
Get your structure right
Make setting up tax and legal structures a priority. Regardless of the size of your business, it’s vital you receive professional advice and implement the proper structures from the initial stage of setting up your business. The same runs true for managing your foreign currency exposure. When operating a global business, creating certainty around cash-flow and profit can help protect your bottom line, particularly when markets are volatile, and exposure is high.
Pitcher Partners Managing Director Rob Southwell suggests there are three key questions businesses should ask before going global:
How are you going to fund expansion?
What existing profits are you prepared to put back in your business?
Do you have a partner who can support and provide clarity on where your business is in terms of cash-flow?
For further insights and discussions from the panellists head to ofx.com/top-tips-for-expanding-overseas