Good preparation increases the chances of successful international expansion
As with any business venture, you should prepare your company’s international expansion in detail. Too many companies, especially at the beginning of their internationalisation, place too little focus on careful preparation of the internationalisation strategy. But translating the website and a few product sheets are only small building blocks of an internationalisation project. This is by no means the end of the story. As you will see, careful preparation will save you a lot of time, many mistakes and most likely a lot of money in the course of your project.
To help you prepare, we have outlined 5 questions that every entrepreneur, country manager, country launcher or project manager should ask themselves before embarking on an internationalisation process.
Take the time to answer the following questions one by one in writing. This will help you to find valuable answers for yourself as well as for your employees, investors or other partners. Also, you will improve your communication with your most important stakeholders in your internationalisation project.
To make it easier for you, you can download a free worksheet here and fill it in. Have two or three colleagues or acquaintances proofread your answers to make sure you haven’t overlooked anything. This way you can get an additional opinion or two.
Question 1: What are my reasons for international expansion?
Do you already have your first customers who demand your products or services abroad and you would like to satisfy this demand? Have you suggested international development to your investors as a growth project in your business plan? Do you have personal ambitions to live abroad, and would you like to establish your business in this country? Do you see yourself more as the founder of a company and, therefore, prefer to build up your business in new countries? Or are you rather leading the well-developed markets as a general manager? There are certainly many good reasons for international expansion, which one is yours?
TO DO: Write down all your reasons and have a trusted employee, boss or acquaintance read them back to you. Discuss them, because a decision made too quickly can have serious consequences, so take the time to think and reflect.
Question 2: Is my home business stable enough?
An internationalization project should only be tackled if your business in your home market is stable enough. Developing your business in another country means that, in most cases, both the founder of the company and some of his best employees are assigned to the project. It is, so to speak, a matter of setting up a new company. Assume that you will start up again in the new country, even if you already have a solid business in your home country.
TO DO: Write down the risks you see for your core business. Share them with the project team. The sooner potential risks are shared and discussed, the sooner you and your team can take countermeasures.
Question 3: Can my current business continue successfully for 6 months without my best salespeople?
Besides the successful implementation of the Market Entry Strategy (localization, first steps in operational marketing as well as the question of good recruiting), internationalization is of course mainly about generating first sales! Addressing and convincing new customers is the work of your best sales staff. They should help to try out and adapt the successful sales strategies of your home market in the new markets. Your core business in your home country should be able to continue without your best sales staff for about two quarters without any problems. If this is not the case, you must ask yourself the question of whether you should start your international expansion project later.
TO DO: Sketch out the “Internationalization” project team and work out several scenarios of how the teams in your home market would get along without your best sales managers. Is there enough young potential in your company to be promoted to sales manager? Talk to the employees and their teams about your internationalization project. Don’t make decisions over their heads if you want to count on committed employees during this development.
Question 4: Do I have the financial resources to expand my business internationally?
Let’s face it, internationalization is a big investment: both for your team and financially. In addition to the salaries of the project team, there are many additional costs involved: localization, marketing campaigns, trade show appearances, office space, travel, business development and much more. Don’t economize on internationalization but be proactive.
A small tip: You cannot develop a business successfully, quickly and sustainably internationally with just one (overstretched) intern.
TO DO: Develop a realistic budget for the first 12-18 months. When you are finished, expand it again by at least 25-30%. This will bring you very close to a realistic budget estimate.
Question 5: What are my personal ambitions to become internationally active?
You should urgently ask yourself what your personal ambitions are and whether your current situation in life allows you to go international. As a managing director or project manager, you can assume that you will have to accept increased travel (assume weekly trips). In addition, depending on the team structure, you will be faced with a double workload, especially at the beginning. You will have to take care of your home business and at the same time develop new markets.
TO DO: Write down a list of personal reasons and risks. Be as honest as possible. Blockages or risks identified early can usually be easily removed or dealt with.