Operating a business outside your home country sounds appealing, and can in fact be an excellent way to take your organization to the next level. But, in addition to ensuring that you've perfected current processes first, expanding to foreign markets requires substantial time and resources and careful consideration of several factors.
Haithem Elembaby is a startup founder with multiple exits, and is now an SVP at Harbinger, a firm that helps foreign startups gain sales traction in the U.S. market.
“An initial step is understanding where your value proposition will be most compelling. Sometimes, carving a niche that your competition has avoided is a much easier strategy than going head to head," he says.
But before you embark on that strategy, consider the following advice to help lay the groundwork for success abroad.
1. Join forces with the locals.
Certain markets may require collaboration with a local partner.
“Make sure you assess local regulations and expectations from new market entrants when determining which foreign markets to pursue," suggests Elembaby.
Tim McHugh, CEO of global book publisher Saddleback Educational Publishing agrees, citing the example of Starbucks. “For years, Starbucks didn't know how to enter India as coffee is not as big as tea in India," McHugh says, "but recently [they] partnered with a local company, Tata Beverages to have a better chance of success."
When considering foreign markets, it helps to learn the nuances of how your new audience makes purchases.
“Map the key stakeholders and understand how to interact with them," says Elembaby. “For example, does the culture value directness or is relationship building more important? What works in New York will not necessarily work in London, let alone Beijing."
You should also think through the economic and political stability of the region you're targeting.
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