By Aaron Rosland, Senior Economic Officer, Government of Ontario,
Deciding to expand abroad is one of the biggest decisions for your business. Naturally, guidance varies depending on your destination but one absolute must is a thorough strategy, and I would recommend an approach called Pre-Pro-Post.
Pre are those things which you must consider before you begin to expand to lay the groundwork to ensure success; Pro is the programme or activity that you are actually implementing; and Post is what you do as follow-up after you have entered a market.
From a Pre perspective:
Even if you only have an inkling that you may want to expand your business abroad, now is the time to start exploring and strategising. Being proactive does not mean going into overdrive and overtaxing the resources you have; it means realising the need for a plan and starting to think about all possible angles. I once had to resolve an issue for a company that set up an office abroad before realising it would take six to eight months to obtain work permits for their staff. With better planning, this could have been avoided. I recommend between 12 and 18 months as a reasonable amount of time to plan ahead — this should allow things to take shape naturally.
Do make sure you understand the marketplace.
When considering a location, do your research. Important questions to consider are whether there is an educated workforce that has the right skills for your business, and what incentives and programmes are on offer to help new businesses get off the ground. If an environment of innovation is important, look for somewhere with a track record of research and development and incentives that promote it. In many jurisdictions, including Ontario, the government provides resources that are a great place to get started.
Do get things right the first time.
Financial and legal matters need to be given careful and detailed thought ahead of a move. So I always recommend that my contacts seek professional advice to ensure they don’t waste time or resources.
Be sure to consider: What are the compliance requirements in the country? How do I send someone there to work on the project? What support is available to me from a friendly source? How do I protect my intellectual property? When it comes to the legal or financial questions, it is just not worth penny-pinching.
From a Pro perspective:
Don’t forget that cultures vary.
While international business coaches will often stress understanding cultural differences when working in foreign countries, I prefer to work from similarities. The similarity is that everyone appreciates being in ‘a relationship’. So, get to know the person you’re doing business with, be attentive to their approach and open to learn and adapt to their culture. The interesting and exciting part of working internationally is trying to understand how your culture intersects with the new culture.
Do act like a start-up.
Your internationalising business is a start-up and must be treated like one. Therefore make sure that you treat your domestic and international business as two separate entities. Your international business is a new venture that needs time, attention and resources — just as if you are first starting the company. In Ontario, we recognise this and offer networking opportunities and support for entrepreneurs.
Do be present and visit your new market often.
However established, celebrated and stable you are in your domestic market, you must see your company as unknown and untested in the new country. My advice here is to regularly visit to build credibility and establish relationships. This will help you to become involved in local industry, and also to establish whether there is a cluster or what relationships to build with your supply chain. In addition, strike a balance between giving independence and freedom to your representatives abroad by connecting with them and setting deliverables. If you do not proactively visit the market and engage, it is all too easy to become “out of sight, out of mind”.
Do create support networks.
Your challenges will almost certainly have been faced by others and they will have interesting insights to offer you as a business mentor. I wouldn’t necessarily recommend a contact in the same industry (for competitive reasons), but it would be good to choose someone from an established company. One of the best decisions I made while working in India was to join a business breakfast group. Some members had been in India over 17 years and some for less than two months, but we could all share challenges, solutions, issues and laughter. A group like this can be your unofficial board of directors, helping to guide you and your company.
Aside from your mentor(s), another way to collaborate is to join or establish a consortium of complementary companies from your region or country. Not only does this minimise your risk, by “going it together”, but it also provides a potential buyer with a complete solution rather than just a part of it. This makes it easier for the buyer to visualise how your product fits into a system. So few companies do this, but co-opetition is the new normal for international business and it enables you to leverage each other’s networks and resources, and even split some of the costs.
From a Post perspective
Do follow up.
It may seem like Business 101, but following up is surprisingly uncommon, even though it can make all the difference. You immediately set yourself apart as a responsible businessperson. I try to send a thank you note or points from the meeting as quickly as possible following all meetings, along with any relevant material or information.
Expansion is always risky, but choosing to do so in an entirely different culture, climate and even language can seem extremely daunting. Good planning will minimise the risks, and my advice is to apply this Pre-Pro-Post strategy to anything you do. I find it a useful, if not essential, business strategy.
For more information about Ontario and how to contact Aaron, visit www.investinontario.com
The International Festival for Business – IFB 2014 – is the most exciting international business initiative of 2014 and International Trade Expo will be at its heart.
A two day expo with exhibitors, seminars, workshops and networking events designed to plug your business into the engine of international trade. Expert speakers, country profiles, advice clinics and innovative solutions for the challenges of doing business in the global market place. International Trade Expo is the event for everyone concerned with international trade.
International Trade Expo 10-11th June, Echo Arena, Liverpool
For more information visit www.internationaltradeexpo.co.uk