Thinking of going global? Here are 5 steps you need to take before you take the leap.
Going global is often a dream for startups and small businesses, but it can be a huge undertaking with the potential to disrupt existing business activities. Hence, for CEOs and founders, it is essential to understand the full impact and determine if the rewards outweigh the risks. In this complex and dynamic process, it is important to gain a deep understanding of the target markets, evaluate the competition, customer base, local business and market trends, regulations and industry standards to successfully launch and drive growth. While the list of things to think about is large, here are 5 key steps you must consider taking before going global.
1. Start with a deep dive Due Diligence
Heading out globally? Get a map first. Find out as much as you can about the market, competitors, local trends, customs, government regulations and laws before you venture out. This is valuable as it will help you ascertain:
- Product-Market fit and existing competitor activities
- Cost of setting up, localization and acquiring customers
- Ease of operations and doing business (including making an exit)
- Does your business offer sufficient differentiation? And at the right price?
- Size of the opportunity products.
- How long will it take you to capture your targeted sales
2. Create a strategy to fit the market – and a business plan to support it
Each market is likely to have its unique nuances, opportunities and challenges due to economic, cultural, governmental, and market conditions. It is essential to think locally when developing a strategy, instead of trying to replicate what may have worked in another market. Success will be driven differently in each market and while it is important to stay integrated with the overall corporate strategy – it is equally important to shift context and think differently.
- Define strategy across time frames – see whether your current business model work or if it needs adjustment (or a total overhaul)
- Definite success measures – specific to that market with a reasonable growth over years and see if that aligns with your ambitions.
- Decide if you need to up a separate company, acquire a business or work in a joint venture with a strategically relevant business partner
- Budget it out and see if it makes economic sense
3. Build a team, but in a slow and steady way
Often companies want to hire local teams as quickly as possible, but it may be prudent to wait before doing this in a big way. Take your time to understand local employment laws as well as talent needs of the new organization and see if any existing team members can take on the role.
Try and explore options to cream lean teams at a local level with freelancers and gig workers before hiking up long term overhead costs.
4. Product Readiness
Is your product global enough to work for the new chosen market? Move beyond assumptions, and test out on a pilot basis to gauge purchase intent, product feedback and more. Based on the product gap analysis, take the right steps to adapt your offerings to achieve high-impact product differentiation.
- Review government, tax and industry-specific regulations to ensure that compliance and certifications are obtained if needed.
- Determine if any localization of the product is needed.
- Initiate a patent and trademark review—some countries are known for “copying” good ideas.
- Initiate testing and quality assurance review based on local standards.
- Consider a local logistics and distribution network. Who will sell your product and how will it get to them?
5. Think if you and your organization are ready for this
Global expansion comes with multiple levels of complexity across – culture, tax, team dynamics, financial outflow and new opportunities. However, it can also be an extremely exciting proposition that can propel your business towards new growth.
Before you take the leap – think of your risk appetite and commitment to making this happen. Also consider if you are truly able to break through the “one size fits all” mindset which can have short-term benefits but can create hurdles in growth in the long term.