How to prepare your International expansion in 7 steps

Whether you are a European, American or Asian based company and are attracted by another large consumer market as a growth opportunity, international expansion requires thoughtful consideration on a number of fronts that require preparation work that will be detailed here in 7 steps.

I would strongly advise to use the services of an agency or advisor knowledgeable and experienced in the targeted market or region. This would ensure you have access to the necessary information, useful network and proven methodology.

Step 1 — Evaluate your company’s situation and readiness for expansion

First of all make sure to expand only if your business is already strong and secure in your original market. In other words don’t expand internationally to compensate for sales decline or financial challenges encountered in your home country.

You’ll have to invest time and resources to research and understand local behaviors, generate a fresh new customer base, recruit new dedicated resources, learn laws and regulations that will be different.

So make sure your financial situation is solid enough to support the initial investments for the time which will be necessary to generate the first return on your investments. Review your current infrastructure, corporate culture, network and question if your organization is ready for an expansion.

Step 2 — Run an in depth market research

You can’t base your investment on gut feelings, although “gut feel” can play an important role in the initial interest. You’ll have to run a careful analysis of the targeted markets to validate your assumptions and set expectations appropriately.

I describe 4 matrices in detail here on Medium. Two of the proposed methods, the PESTL and the Addressable market matrix will support your decision to enter one or more markets.

Two of them, the Onsite Metrics and Digital Buyers penetration should help getting a sense of the incremental revenue you could expect from the markets you will choose to enter.

If you run all 4 methodologies, you should have a solid base for your market exploration and prioritization work.

There are many sources available for you to fill those matrices, such as government statistics, industry associations, market research reports, trade publications or even company websites, so why not using them and be really prepared!

Step 3 — Develop a plan

When you will be clear about the markets you plan to enter and the chosen timing, you will need to develop a clear and detailed plan that should integrate the resources you will need to hire, either internally or externally, how you will communicate to your existing teams and to the market, the expected outcome, the detailed execution, including the marketing investments, the localisation efforts to resonate with the intended audience and operations efforts to deliver an outstanding experience.

Step 4 — Beef up your production capacity

Plan your production according to your prior market’s assessment. Depending on your current manufacturing capacity, your manufacturing and labor costs, you might benefit from economies of scale while increasing your current production and delivering new markets from home. But you might have to open a new production facility in the targeted market for legal reasons or to reduce cost and timeframe for delivery. Many foreign countries offer lower operating costs, particularly reduced labor costs.

Step 5 — Check all legal requirements (yes, all!)

There are heavy legal considerations for setting up and running international operations and you will have to comply with all those domestic laws. In this case, I would recommend even more to seek advice from trustworthy local legal counsellors to acquire the detailed knowledge which will be specific to new markets. Below is a safety checklist of the possible legal areas to enquire.

You should start by registering your company name trademark and patent in any market you are planning on entering. Some regions like the European Union offer bulk registration.

You would have to comply with different tax regulations and again, there are international agreements between states.

You would have to comply with different tax regulations and again, there are international agreements between states.

Step 6 — Review the possible operating models

Start thinking about the level of autonomy and the split of activities between the headquarter, the new entity and even outsourced capacities. There are examples where the decision might be more obvious like for a corporate logo, mission and vision, or the recruitment of senior management, where both the decision making and the execution should be centralized in the headquarter. In the case of marketing campaigns and management, you will likely define the strategy and budget from the headquarter but let the local office lead the campaigns and report performance.

Step 7 — Start recruiting local experts and already think about opening an office

You can start relying on local experts who will contract with your company but at some point you will probably want to open an office and recruit permanent staff. If you think about opening an office, define the important criterias for your business to compare one location with another, such as the access to multilingual talents in your industry, ease of business, operation and hiring cost.

You will need to research the local culture, understand the impact different languages, history and culture will have on your corporate culture and management style. Check out this article I wrote on how to make multicultural teams work. You will have to get ready to invest in bridging the distance through collaboration tools, more communication and more meetups (even virtual).

And you will have to learn what differs between your historic market and the targeted market in terms of employment laws because you will have to comply with all those wage, health and safety requirements.