How to Prepare Your Business Model for International Expansion
As an entrepreneur, you are in an exciting position. You have successfully grown and are ready to expand in the U.S. The new opportunity is a different environment — and one that should be approached with caution to maximize the chance of success.
Opportunity is intoxicating, and many entrepreneurs find themselves rushing headlong into a situation that they should have approached more thoughtfully. It is true that successfully tackling the U.S. market can quickly scale the revenue side of a business, but the operational side must be ready for the increased demand placed on it by the larger market.
Tweaking Your Business Model
When operations fail to keep pace with demand, businesses that once had great potential will struggle to maintain the market share gained after their reputation is tarnished and their credibility is lost. The good news is that entrepreneurs who are knowledgeable about the weaknesses of their business model will be able to not only increase revenue but also improve their overall business operations by entering the U.S. market.
To ensure the transition goes smoothly, keep these approaches top of mind:
- Remain Connected
One of the hardest parts of running a global business is keeping everyone on the same page. When teams cannot work together properly, friction leads to finger-pointing. Generally, there is some validity to claims made on both sides, but a lack of context keeps people from developing a clearer understanding of the issues.Keeping different locations of a business tightly connected can strengthen communication and improve business models. Weekly meetings, especially using video conferencing, will ensure specific departments are not siloed from the overall business. If it makes sense, consider implementing a program in which employees or leadership members rotate into the U.S. office to help connect the team to the new market. This arrangement can provide valuable networking opportunities that help encourage continued growth. Stakeholders based in the U.S. should also travel to corporate headquarters to observe the business in its home country.
- Be Aware of Changing Differentiators
Different geographical areas have varied competitive differentiators. To secure your company’s valuable differentiator, research the U.S. market before taking the leap. If your differentiators in your home country no longer set you apart from other companies in the U.S., you will need to find new differentiation to pursue. It is undoubtedly best to begin this process beforeyou make the move to your new location.A multinational corporation in Europe, for instance, may not be allowed to move a customer’s personally identifiable information across borders. As a result, a company with a solution that allows them to analyze data while keeping it in the country where it originated from is equipped to be successful because it has a leg up on the competition. On the other hand, most American companies would be less concerned about transporting customer data if their data and analytic tools are based within the U.S. What was a dominant differentiator in Europe has little to no advantage in the U.S. market, illustrating that the challenges of operating in Europe, Asia, and the U.S. have limited similarities.
- Understand Marketplace Success
It is vital to understand the differences in how businesses approach the American market. It is understandably tempting to rely on the tactics that brought your business success in the first place, but there is no guarantee that this approach will translate to the new location and new customer base.In Asia, distribution is everything. Consumers purchase goods from retailers, so breaking into the retail market means a company has made it. On the other hand, in the U.S. market, awareness is the basis for business success. Getting a product onto retail store shelves does not mean that consumers will buy it — they need to know what it is.
One way to better position yourself for success in the U.S. market is to have someone on the ground who can help guide your decision-making based on his or her knowledge of the lay of the land. Getting help with your international expansion before you enter the market is critical because it can ensure a smooth transition and keep the costs associated with international moving operations to a minimum. To learn how we can help, do not hesitate to reach out to us for a consultation. Not only do we provide the strategies you need to ensure your business’s success, but we also help you implement them one step at a time.