By Vincent Potier, COO of Captify
Taking the leap
For any small business, expanding into a new market is both incredibly exciting and extremely daunting. Expanding overseas not only marks how far you’ve come and your speed of growth, it paves the way for the future of your business. But in an economic environment that demands you either “diversify or die”, how can businesses ensure they’re expanding wisely, and setting themselves up for success?
Growing your business abroad shouldn’t be a move embroiled in fret and fear of failure. Getting to know the new market, choosing a location carefully and keeping a tight hold on your brand’s identity will give you a fighting chance of achieving your overseas ambition. It’s all in the background research.
Knowing your market
You may know your current market inside out, but this won’t get you very far in your new venture overseas. The first rule of thumb is to get to grips with the individual quirks and patterns of the market you’re moving into. A great way of fast-tracking this learning process is to draw on the knowledge and expertise of someone who has spent years operating in the market you’re moving into.
Location, location, location
As with buying a property, finding the right location for your expansion is crucial. It’s not simply a case of joining the ranks of companies rushing to set up in a particular “hot spot”. With the German ad tech industry seeing some of the fastest growth in Europe, is was an obvious place for Captify to grow its presence overseas. But Germany is extremely decentralised, meaning there isn’t one obvious location to set up a new office. Cologne is the home of insurance, Frankfurt is the main hub for banking and Berlin has created a name for itself as the capital of start-ups, due to the large number of developers based in the area and the low rent prices.
You need to base your business in an area that allows you to build on your network and connect easily with relevant organisations. For Captify, Hamburg was an obvious choice because it has a very strong media tradition and services history. The city is a leading German market for advertising agencies, making it an excellent base to grow commercially, and its media lineage provides a pool of appropriate staff to recruit new talent from.
Balancing brand identity
Finally, it’s important to consider how your company’s identity will translate in the new market. While you must embrace and adapt to the culture and traditions of your new location, it’s equally important to keep a close grip on your business’ mentality and ethos. Your new location shouldn’t dictate your company’s culture because you will lose the individual quirks that are the building blocks of your brand’s identity. Failing to preserve your identity will lead to the creation of a patchwork of companies bound only by brand names and technology; not the best way to build a strong, cohesive company.
Likewise, barging into a new market and trying to force it to adhere to your way of doing business won’t work either. Balancing your brand identity with the demands of the new market you’re operating in will engender you to other local businesses.
Because of the speed at which they operate, digital businesses sometimes rush head first into overseas expansions without investing enough time into background planning. But they should. Nail the above three factors, and the challenges you face when expanding overseas will pale in comparison to the opportunities that will come your way.