I wholeheartedly believe that there are opportunities for British businesses to make a name for themselves abroad, but not enough preparation goes into it.
Timing is everything. Whenever people ask me if they should expand overseas, the first thing I ask them is what percentage of their domestic market they have. There are so many things to take into account when going abroad – regulations, Government policies, customer trends, cultures, currency – the list goes on. If you don’t have a substantial share of your market in the UK – where you are familiar with all of the above challenges – then trying to expand internationally is a huge risk. In other words, there’s no point in going to California when you haven’t even cracked Camden.
If you are serious about expanding, give yourself plenty of time to go out there and conduct research, as well as build relationships. This second point in particular is crucial – having a partner who knows all the nuances of that country’s market will make life so much easier for you. The bigger the country, or the more countries you are planning to expand to, the more detailed your research will need to be. I once had a business that had offices in 30 different countries and the employment laws in a number of them were totally different to the UK. When you consider that this was a recruitment business, it was vital we got to grips with the laws in every single one of them.
Somewhere like America can be even more difficult because of varying national and local regulations. In addition the customer culture can vary as well. This is one of the reasons there have been many successful British businesses that have gone to the USA and really struggled. Even things such as symbols and colours have to be carefully considered, as they have different meanings in different countries.
Depending on the type of business you have, you will need to ensure your budget can afford all of the costs associated with going abroad. There are of course some businesses which merely need to demonstrate their global footprint but won’t actually be in all those locations all the time. If this is the case, you can consider virtual offices – a cost effective product which gives you access to a name, address, location and phone number abroad, without a physical office space.
Develop a close understanding of currency relationships and inflation. You may have conducted all your research and done everything right, but if you haven’t understood the currency then your profits may be less than you think I remember having a business in Turkey that lost a significant portion of its year-end profits due to unpredictable inflation and currency fluctuations.
Businesses that go overseas can really take themselves on to another level, and if you get it right you have the opportunity to become hugely successful. However if you get it wrong you can suffer great losses. Therefore the ability to prepare properly and read the market – skills every entrepreneur needs – takes on more importance than ever.