Moving your business abroad can open new opportunities. In our hyperconnected world, approaching new global markets is easier than it’s ever been. Still, conducting business globally isn’t without its difficulties – new languages, cultural norms and business customs, if not planned for, might get in the way of a successful international plan. Here are some of the most common mistakes that companies make when expanding across the border – read on to make sure that you don’t end up prey to these common pitfalls.
Not Hiring a Qualified Multilingual Team
It’s tempting to send your seasoned team members abroad to start a new office. They’ve proven their loyalty to the company, their work ethic and their skills. Yet just because they’re successful in your local market, doesn’t mean that they’re the perfect person for your overseas expansion.
Having the right team is one of the most important factors for success. When you’re entering a new market, having a team that understands that market, the business culture and most importantly, speaks the language, can be the difference between a successful endeavor and a quick failure.
If you don’t already have qualified multilingual or multicultural talent onboard, consider hiring local talent to manage the new office. The right local candidate can anchor you into a new market in a way that your displaced team members can’t. Language testing can ensure that candidates you are considering, truly have the bi- or multilingual skills that will get you ahead in your new venture.
Most importantly, don’t let some imaginary number dictate critical hiring. Quality talent is an investment, so be willing to pay accordingly. Hiring the wrong person could end up being an even more expensive mistake, so hire the absolute best person possible to lead your company in a new region.
Not allowing for Autonomy
It’s great to want to be hands on for your new expansion. Having a management team that cares about the state and well-being of a new office can improve the motivation and confidence of your overseas employees. Micromanaging from across oceans, however, can cripple a fledgling office’s growth.
Make sure that any new venture you open abroad has an on-site person who can make tough calls during the day-to-day. Establish easily understandable expectations that define when said leader has full authority, and when they need to consult management across the seas.
Don’t let internal bureaucracy deter bringing something to market. The new team should be focused on building, executing and growing, rather than filling out endless status reports to appease the suits at headquarters.
Not visiting enough
Allowing autonomy is important, but it goes hand in hand with keeping up consistent communication with your overseas venture. Set up times to speak with remote teams via phone or video, so that you remain present in the organization. Don’t waste people’s time talking about things that could easily be done over email – make sure that you’re using these calls wisely to answer big questions and solve difficult problems. Most importantly, use the time to build relationships and establish rapport with your new office.
Although the local team should have authority, the company’s veteran leadership needs to show its presence, and most importantly, that they care about the venture as more than just a new income source.
Going abroad for the wrong reasons
Your company’s reasons for going abroad may dictate your success – and simple frustration with the local market might not be as good of a reason as you think.
A survey conducted by Chase in January of nearly 3,500 executives of mid-sized and small companies found that 73% intended to expand into new market in the coming year.
The promise of emerging markets is enticing, to be sure. Understanding the long-term investment needed for global expansion however, is a more difficult egg to crack than it seems.
The Economist Intelligence Unit completed another survey this February, of 480 small and medium-sized businesses in 12 countries. Of those businesses, a shocking forty percent earned absolutely no revenue from their international operations in the previous year. Yet in five-year projections, seventy-two percent of the companies surveyed expected to earn 11 percent to 50 percent of their revenue internationally.
Expanding abroad isn’t a get-rich-quick scheme. It’s a long-term investment that warrants careful consideration and even more careful planning. Being – or not being – adequately prepared, might be the number one divider between success and failure in international endeavors.
Lack of preparation
Companies that fail to prepare for globalization early on, are likely to have a difficult time transitioning into new markets.
You’ve heard of that saying, “think globally, act locally?” Having an international mindset from the get-go can help to guide business plans and strategies in the right direction to prepare your company for an eventual expansion. When it’s time to make the move abroad, your internal workings and company culture will already be prepped for global transitioning, and your managerial staff and executives will have been long-focused on the end goals, meaning there will be fewer surprises or variables during the transition period.
Expansion should not be an afterthought. Companies that are patient and plan for gradual overseas growth can reap the long-term benefits – but you need to be prepared with the time and money to make a solid, well thought out investment.
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