Managing a business is no easy feat nowadays—economic and technological changes take place at an astonishing rate, meaning that the parameters for doing business also constantly change, notes Neal Jenson, Managing Director of a Salt Lake City-based consulting firm that has advised a range of businesses, from small start-ups to Fortune 500 companies.
If you are a CEO or an entrepreneur with your own business to look after, you are also in charge of nurturing and growing the business.
The first step to grow your business is to know how to make it thrive from its current state. One move that business owners can make to expand their business is to take it to the global level. However, before venturing out onto the global stage, it is critical to know if it is wise to take this leap, or to just stay put and conquer the local market.
Local or Global
Today, with the world becoming connected and everything seeming to be a stone’s throw away, many companies are entering the global arena. A survey conducted by Wells Fargo among American companies in 2016 found that an overwhelming 87 per cent were of the opinion that international expansion was vital for long-term growth. Be that as it may, there are still a handful of companies that see the benefits of staying local in order for their business to thrive.
Staying local does not mean having just one store in one location. What is meant by staying local is to concentrate your business on a particular city or region, even if you operate online.
By staying local, your business will have a more defined market, a clearer focus and a more targeted and personal branding. Staying local may also allow you to nurture the relationship between your business and its customers, which is one of the most important parts of a business. On the other hand, going global results in an increase in sales for your business as you open up your products and services to consumers from all over the world. This allows your business to not depend entirely on the local economy.
Knowing How to Decide
To know which path will benefit your business more, you will have to know the deciding factor. The deciding factor for any business is its target audience, followed by the market for expansion in the industry.
Social media is undoubtedly one of the best tools to find and to get to know your target audience better.
With the aid of social media apps such as Facebook and Instagram together with analytic tools, you can easily collect important data, identify and resolve issues as well as plan the growth of your business—all without costing you an arm and a leg. For instance, you can use the demographics data gained from a promotional video you created to identify the interest of your target audience, and thus make the necessary changes to your business plan in order for it to grow.
To determine whether to stay local or to go global, be sure to know your business inside out to secure a bright future for your business.
What is the most challenging issue for companies looking to expand globally?
37% – Knowing where to start
34% – Finding the right local partner
14% – Dealing with different government rules
3% – Managing cultural issues
3% – Others
As can be seen from the survey above, the issue that most companies often find challenging when going global is to know where to start.
If you have weighed your options and decide to go global, it is vital for you to fully understand the impact this will cost your business.
Bear in mind the words of Diego Caicedo, co-founder and CEO of_OmniBank: “It may be better to serve one country well than several countries poorly.” If you feel that your business will be better off staying local, then it is advisable to just stay put and maintain your usual business. However, if you see the potential for launching your business at a global level, then make it your target and take the steps needed to see it come true.
TAKING YOUR BUSINESS GLOBAL
Take One Step at a Time
- Start off with one particular product or service to test the market.
- Introduce the next product or service if the results are positive and profits start to roll in.
Create an International Business Plan
- Consider your overseas audience and international business goals.
- Clearly define your international business objectives and ways for achieving these.
- Consider the nature of your business, the intended target regions and projected returns.
- Include any existing experience you or your employees have in international business.
- Consider the global economic outlook.
Use Senior Executives as Leaders
- Reduce the need to train new staff—don’t hire an entirely new team.
- Make senior executives with proven track records the leaders for your new team.
Know Local Laws
- Be aware of the legal requirements of the countries in which you are planning to operate to minimize and avoid unnecessary commercial risks.
- Develop policies, procedures and handbooks that take cultural and linguistic differences and the consumer habits of a particular region into consideration.
Keep Local Employees Happy
- Create remuneration and benefit packages that are attractive to local staff.
- Hire a translator to help you to communicate better with local employees.
Foster Good Relationships
- Develop a strategy and model that will support the ecosystem of your business. Create alliances with other parties or develop a distributorship programme.
- Form relationships with suppliers and local marketing contractors in every new region.
- Form regional sales goals requiring the involvement of local parties to keep the relationship active.
Get a Helping Hand
- Get experts on board, such as professionals that can help you navigate legal/compliance requirements.
- Get in touch with organizations in your target countries that are set up to attract investments.
Be Willing to Modify Products/Services
- Products or services may need to be modified to appeal to the target market.
- This may include product name or packaging.