Research shows that less than 25% of U.S. business ventures overseas succeed, according to Hilka Klinkenberg, founder of Etiquette International. The difference in cultural practices between local and international consumers is an aspect most entrepreneurs overlook when taking businesses abroad.
For any business to succeed internationally, it must offer products and services that blend with the culture of the local people. That is why entrepreneurs aspiring to go global must avoid the common mistakes that small business owners make when setting up an organization. Researching and following the right steps is the only way to run a successful global enterprise.
Utilize Financing Options
Expanding a business overseas is an expensive venture, and with financial institutions setting strict standards to access loans, chances for growth are limited. Fortunately, there are other ways to secure capital. Venture capitalists, foreign investors, and private equity firms provide financing opportunities for both small and mid-size companies.
While you can get enough capital from foreign investors, be aware of the consequences of securing a loan for setting up a global company. For instance, most lenders charge a fee for loan processing, which can be an additional expense in your repayment plan. You will also risk earning additional fees for pre-payment or late payment, depending on the terms of the contract.
Make sure you comply with the rules and regulations of the state you intend to take your business to avoid legal issues. Not to mention, read and understand the terms to ensure you are on the same page with the lender.
Develop a Strategic International Business Plan
First, research the target market to determine the chances of success for your products and services. Keep in mind that what you are selling in the local market may not be accepted overseas. Therefore, invest in market research to gain reliable feedback on what target consumers expect from an international brand.
Once you have all the facts, focus on developing a strategic plan that will help you meet the needs of potential consumers. With a solid plan, you will define your short- and long-term goals and create a realistic budget.
Take Advantage of Technological Resources
Incorporating technology in business can help you overcome the stress associated with running a company overseas. When setting up an office abroad, outsourcing services or sharing data with employees can be difficult due to time zone differences. But with technology tools like cloud sharing, you can share details globally without leaving your location.
You can also hold meetings virtually using audio and video conferencing software on your phone or laptop. Also, with the right technological tools, marketing your business becomes less stressful. You only need to prioritize advanced content marketing tactics and stay up to date with technology and marketing strategies to stay ahead of competitors.
Don’t Shy Away From Networking
Networking is essential if you want to succeed in the international market. When you grow your network, you meet potential business partners, trust between connections build and opportunities arise. For example, many small companies rely on word of mouth for marketing.
If you have a network, they will refer people to your business, which results in business growth and success. So, create time for linking with other entrepreneurs, consumers, and investors in your industry to increase the chances of marketing success.
The Bottom Line
Building a business overseas requires a lot of consideration from the capital to legal compliance, communication, and marketing. It is essential to have a strategy in place to ensure you get the right amount of financing and meet all the legal requirements.
Apart from investing in technology for communication and marketing, set aside time for linking with other people in your market and focus on opportunities that will help your business grow.