With the support of fast-changing and ever-improving technology and infrastructure, the world has seen immense advancements in global trade. This has helped in levelling the playing field for SMEs, thus allowing them to compete with bigger companies. As SMEs are now able to tap on the global market on their own, chances for overseas business expansion are “golden opportunities” that are not to be missed by both entrepreneurs and business leaders.
Are these opportunities really as good as they seem on the surface, or do companies mistake expansion for growth? Critical decision makers need to think twice and make well-informed decisions. Here’s why, and how.
1. Risk? Or reward?
Do research and follow the money. If your new plans for expansion are aligned with where the money is coming from, then it will be a better choice to make a move there. At the same time, if this is a totally green field move, be prepared for it to be a big gamble that may backfire big time. It is also important to be aware that the odds will always be stacked against you. If a decision is made to expand overseas, perseverance and mental strength will be some of the best friends you will ever have.
2. Living in the ecosystem
Do at least a year of extensive groundwork and research to embed yourself in the ecosystem before establishing concrete partnerships. Before expanding overseas, ensure you have proper insights into the nuances of how people in each country work. This could range from business culture to payment structures, as well as identifying the processes and infrastructure required for the business to succeed. When that has been established, the company needs to personally walk the ground and talk to their target audience to understand what makes things work, local likes and dislikes and the overall response to the company.
3. Establishing the right partnerships
With the confidence that groundwork has been sufficiently covered, focus on the kinds of partnerships that you can build. Having a strong partner makes your overseas expansion a lot easier as the workload delegation between both parties is a key component for success.
It is also crucial that the company does not get stuck with tunnel vision and consider the partnership only from a one-sided perspective. Working together with a local partner means that one should always be willing to take a step back and think about how both parties can work things out together.
With the right partner on board, we need to remind ourselves that empowerment and perspective is key to success. Local knowledge and insights will take you places, but trusting the process and being open to experimentation will allow you to be truly competitive in the market.
4. Talent, talent, talent
Do not be afraid to hire local talent. Most likely, they will have better situational knowledge. At the beginning, it will be beneficial to have a more experienced person from the headquarters be a part of the expansion process. This person will be able to convey the company’s culture and work processes in the right manner, eventually finding the right balance for the target market.
Do not be afraid to pay a premium for the right talent or make a hire when the right talent presents itself. Having the right talent will ultimately benefit a business’ long-term prospects.
5. Going digital with the right content is key
The world lives online, and the benefits of being able to transact online means that you will be able to reach your target audience 24/7, 365 days a year. As a SME however, every dollar matters. Hence, it is crucial to build your digital presence organically by using the right channels before thinking about spending advertising dollars.
Think forums, interest groups and social platforms that vary in popularity from country to country – there is no “one-size-fits-all” strategy. Content needs to be localised and your outreach strategy should be regularly reviewed to cater to the ever-changing tastes of consumers.
Putting out the right content ensures that you build a core customer base that will keep returning, which in turn creates a new wave of word-of-mouth referrals.
Always manage your own expectations. Expanding internationally is extremely challenging and highly dependent on a number of factors, especially the 3 ‘Rights’ – right market, right timing, right resources.
It is important for business leaders not to mistake expansion for growth as this might not necessarily translate into the right move for the company in the long-term. Some businesses are able to thrive locally and expansion does not guarantee that the company will embark on its next level of growth. Successful overseas expansion at the right time, however, will open a lot of opportunities, while also providing access to more global talent who could potentially take your company to the next level.
Jackson Aw | Mighty Jaxx International | Founder & CEO
Jackson Aw is a Forbes 30 under 30 honouree and founder of Singapore-based Mighty Jaxx, a technology driven platform that develops a wide range of collectibles with world class artists like James Jean, Ron English, Banksy, as well as brand partners such as Warner Brothers, DC Comics and Fox Entertainment. Mighty Jaxx has developed over 500 products with collectors in over 50 countries.