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10 International Expansion Strategy Essentials

Your starting point to build a successful expansion strategy

Expanding a business internationally is a bold venture that holds immense potential for growth and profitability. However, it also comes with a myriad of challenges that must be carefully navigated to ensure success. Most, if not all, of these challenges can be prepared for with a considered international expansion strategy.

From understanding cultural nuances to overcoming legal hurdles and establishing a strong market presence, a well-thought-out strategy is essential for international expansion which is why we work with fast-growth companies looking to expand to help them create a unique blueprint ahead of their expansion. 

Here are 10 essentials that should be included in your international expansion strategy when embarking on this journey:

  1. How to do business with cultural differences: One of the most critical aspects of international expansion is understanding and respecting cultural differences. Different regions have unique customs, values, and communication styles that can significantly impact business operations. Conducting thorough research or even hiring locally can help bridge the gap and foster positive relationships with local stakeholders, partnerships and customers.
  2. Research legal and regulatory barriers: From company registration and tax compliance to employment laws and intellectual property rights, understanding and adhering to local regulations is essential for any successful business in a new market. Partnering with experienced legal advisors who specialise in international law can help mitigate legal risks and ensure compliance with local regulations.
  3. Product-market-fit: We all know the importance of product-market-fit, but the mistake we often see is founders/CEOs assuming that their product or service is a niche in the new market, as it is in the HQ market. This is rarely the reality. Don’t put yourself in the position of scrambling to identify a new niche that works in the new market when you’re already over there – do your research before. 
  4. First key hires in the new market: Identifying and hiring key personnel with experience in the target market can provide valuable insights and expertise. The roles and humans you identify as the right ones will look different to other companies because it truly is dependant on the type of business, the HQ setup that exists, as well as their initial goals when landing in the new market. We would usually recommend hiring locally as often as you can in a new market purely to utilise their ‘on-the-ground’ insights and existing network. 
  5. Management of HQ: Another mistake we often see is founders/CEOs flying their top salespeople and leaders over to the new market to steer the ship there. However, this leaves a gaping hole at HQ and with your activities and thoughts being focused on the expansion, HQ must be performing and hitting targets in the background. Another element is communication and resources; Talk to your HQ, explain what might be needed of them, and how their roles and responsibilities might evolve with the expansion. This is crucial if there’s quite a large timezone difference between the two markets. 
  6. Financials and budgets: Managing financial resources effectively is vital for international expansion. Developing a detailed budget that accounts for various expenses, including market research, legal fees, personnel costs, and marketing expenses is strongly advised. Monitoring and tracking financial performance against budgeted targets will help identify areas for optimization and ensure financial sustainability. A growth-focused CFO who is experienced in international expansion will drive and optimise all of this. 
  7. Location - where will you land?: The capital cities aren’t always the best locations for landing. As a business entering a new market, you need to consider where your customers and partnership opportunities are. Factors such as market size, proximity to suppliers, infrastructure, and business environment should also be carefully considered. Conducting thorough market analysis and evaluating potential locations against predefined criteria will help identify the most suitable location for your business.
  8. A set-up checklist: Creating a comprehensive setup checklist can help ensure that all necessary steps are taken to establish a strong presence in the target market. From obtaining necessary permits and licenses to setting up banking accounts and securing office space, having a detailed checklist will help streamline the expansion process and minimise delays. Our friends at Standard Ledger have put together such a checklist for expanding your Australian start-up to the UK.
  9. Target market, competitor, and buyer persona analysis: Buyer behaviours and competitor activities are essential for making your impact and creating customer demand. User feedback testing will help validate your assumptions and enable optimisation of the user experience and customer satisfaction within the market you are expanding into.
  10. Network/local insider knowledge: Building a network of local contacts will never be a waste of time. Call upon friends of friends who you could connect with, even if they’re not directly related to your business – they might come in handy further down the line. You also want to spread the word that you’re here! 

 

In conclusion, international expansion presents immense opportunities for growth and profitability, but it also requires careful planning and execution. It cannot be successful without a strategy that’s been challenged by experienced experts. These 10 essentials are a great starting point for you to navigate the complexities of global expansion and position your business for success in new markets.

If you want your international expansion strategy challenged or want to know more about how we’ve helped companies such as Turo, GoCardless, and Stripe scale internationally, connect with us - let’s have a coffee and a conversation.


ARTICLE by Jonathan Jeffries (JJ), Co-Founder, 14 July 2024

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