International expansion is an appealing concept for all small- to mid-sized enterprises (SMEs). The opportunity to go global represents new revenue streams, higher market shares, and more brand recognition.
But, succeeding in foreign markets requires careful planning and a well-structured plan.
Luckily for you, we’ve included a guide to international shipping, as well as the steps you need to not only manage the risks that may come but also ensure you give yourself the best chance of success.
If you’re ready to seize the opportunities that foreign markets bring, here is what you need to know to make sure your business is prepared to expand its operations abroad.
1. Perform market analysis
One of the main reasons SMEs experience poor returns when pursuing international ventures is poor preparation and planning. Expanding abroad is far different from tapping into another segment of your domestic market.
Being unaware of nuances such as cultural differences, language barriers, geopolitical uncertainties, currency risks, and different tax laws and regulations can result in your business struggling to maintain market share.
Ultimately, this can tarnish your brand reputation, negatively impact your credibility, and cause reduced dividend payout.
To be successful with your international venture, research and strategic planning are a must. Companies who succeed abroad know that they must develop a deep understanding of their target country.
This process involves numerous steps but typically requires competition analysis and assessment of potential customer bases. Partnering with the right local supplier, freight forwarder, or manufacturer will aid in understanding barriers to entry, preferred payment procedures, custom duties, transportation, and the like.
2. Getting the right support in place
While opportunity can result in increased, if operations fail to keep up with demand, your business will struggle to remain competitive and maintain market share.
To ensure operations abroad are set up for success, your company must get buy-in from all relevant stakeholders. All team members and stakeholders must be invested with the idea of an expansion project.
Developing a competitive presence abroad is a long-term commitment that may require more time and resources as the project continues to grow. Stakeholders like executive-level managers, key suppliers, and financiers all must be willing to stay the course to ensure the venture isn’t jeopardized in the first instance of uncertainty.
3. Choose the right target market for expansion
Selecting the right foreign market to expand to can make a world of difference in how seamless your venture becomes. The wrong choice of market can impact your profitability and growth.
When determining the right target market, look at several variables:
- Global buying trends
- Import restrictions
- Market appeal, size, and demand
- Geographic proximity
- Political and social factors
- Currency valuation
- Market size
Another way to identify the right market for your international venture is by examining its similarity to your existing source market. Will your team be facing language barriers? Can social culture impact market adaptation? Does your target market have a trade agreement with your country of origin?
An SME operating out of the United States will find that Canada is a more attractive opportunity rather than Brazil due to the similarities in language and business culture, as well as its geographic proximity to the U.S.
4. Working with a freight forwarder
Once you’ve done the research and identified the right target market for your expansion, it’s essential to partner with the right freight forwarder.
A professional freight forwarder will be able to assist your business with many of its logistic and supply chain challenges, such as navigating international custom duties, shipping laws and regulations, and document preparation.
An experienced freight forwarder will also have an extensive network of agents and carriers that will enable them to quickly and safely transport your goods. This ensures that your cargo experiences safe delivery in the agreed-upon timeframe.
To confirm you’ve selected a reliable freight forwarder for your venture, perform some online research.
Visit their platforms and request a shipping freight quote. These quotes will allow you to see a guaranteed price for your shipment, as well as what freight and fulfillment options are available to you.
5. Formulate the right landing team
The final step to ensuring success abroad is having the right people in place. There are several approaches to this step, depending on your industry and business model.
When companies like Google and LinkedIn looked to expand from their headquarters, they executed their expansion goals by creating a small landing team. This small team was tasked with not only hiring local talent to support regional growth but also to preserve company culture to ensure brand consistency no matter the market.
While SMEs looking to expand may not have the same budget as Google, exploring the market’s talent pool is a great way to tap into the local culture and local knowledge. These local hires can assist your landing team with ensuring marketing campaigns and customer service are effectively targeting local leads.
Are you ready for international expansion?
While international expansion can provide significant benefits to all SMEs looking to experience higher growth, the opportunities are not without their challenges. The advice listed above will enable your company to evaluate better whether or not it is sufficiently prepared for expansion.
But by planning ahead and ensuring the right framework, structures, and partners are in place, expansion can be the right step towards international recognition and success.
AUTHOR BIO
Paul Rehmet is the Chief Product Officer for Shipa Freight. He is responsible for translating the company’s vision into an easy-to-use online freight platform for its customers. In his 25-year career, Paul has held various technology leadership positions with early-stage startups and Fortune 500 companies including Unisys, Destiny Web Solutions, and US Airways.
