When you are on an island, you have to look beyond the borders. So many of the conversations I have with Irish SME owners is about where they are going to expand next. Popular answers are Europe, China and the US but occasionally I will get a surprise answer like Australia or Dubai. Australia? Dubai? Well, why not?
What information are you gathering?
As leader of your SME, you probably are tracking trends so you know how your market is performing. These trends could be impending governmental regulations, visitors to your web site or industry trends. Not only could this data be an indication of where your business might grow but you might be meeting people via trade missions or conferences. Perhaps it is even a long-held dream to set up shop in a particular part of the world. All of this leads to a moment when you realize that there is substance to expanding your SME internationally.
Preparation is everything…
Like any growth plan for your business, developing a strategic plan is the first step. However, it is easy to get caught up in the excitement and let your attention slide from the details. However, given the expense and potential legal and regulatory pitfalls, it is a good idea to stress test your international strategy.
Here are 9 questions to get you started:
- What is your intent? Be clear about your dreams and aspirations. Expanding is not about prestige or the cool factor. There has to be a solid business reason.
- Who is your customer? Different countries have different emotional touchpoints. Do the market research early.
- What variables are you measuring? Clarify what targets (i.e. number of customers, revenue levels) are to be met, the timeline and indicators of when it is too expensive, too time consuming or too resource-hungry.
- What systems or policies need to be put in place? You are likely to be out of the office frequently traveling or in meetings. Identify which team members are leading the home office, how communication will be handled and which decisions can be made with and without your input.
- What are the potential obstacles and how would you handle them? There are different types of obstacles and even barriers (regulatory, political, social, legal, employment, etc.) to your entry in a foreign market. Take the time to investigate and devise a plan to handle them.
- What makes your product and/or service so special to this particular foreign market? Write your value proposition
- What criteria would tell you that expanding in X country is a bad idea? Simply put, what you don’t know will hurt you.
- How will the international part of your SME be funded? Making sure there is enough capital to support this venture is key so knowing if the headquarters is supporting it or it is to be self-funded is crucial.
- How will you staff the the international branch of your business? There are advantages to sending your own people as much as hiring locals or even a combination of both. It gives you a chance to explore HR policies and employment law.
- What possible effect could international expansion have on your existing business? Asking this question will help you and your team determine if your SME can handle your absence, the financial commitment and any other possible effects.
Stress testing can be an eye opener
So many of the conversations I have had with Irish SME owners has ended up with them saying, “there is more to this than I thought.” One of the ways to get the information for your stress test is to do a PESTEL analysis. Often it can be helpful to hire a consultant so no one is tempted to avoid any of the questions. No matter how you go about the process, conducting a stress test on your international strategy will support better business planning.
Related posts: 8 Tips For Expanding in the US For Irish Small Businesses