Before making the decision to expand globally, it’s important carry out thorough research. Alongside the advantages of global expansion, it brings many challenges and is a complicated process. Going into a new market isn’t always a smooth transition, but with the right plan, partner and process, it can be.
Here are some key global expansion mistakes to avoid when you're starting your journey.
Not expanding for the right reason
You need to ask yourself why you’re expanding globally. If it’s because you’re struggling to reach the domestic market, that often isn’t the right foundation for global expansion. That’s not to say the idea should be completely written off, it’s just important to get expert advice on.
The promise reaching a new market is appealing, however growth in these new markets can take a long time. Before deciding to expand globally, it’s important to have a solid foundation in a domestic environment first, as it is a long-term investment to make.
Not having a plan in place
Early preparation and considering the potential risks and challenges that can come with global expansion, is key to planning and preparing for the process.
Different countries have different markets, laws, cultures, and needs. Therefore, a roadmap for one country could be entirely wrong for another. Researching the marketplace will give you an idea of the demand your product/service, your competition, alongside the hurdles you’ll need to overcome to set up business in that location.
Alongside planning for potential markets, it’s important to plan and analyse your business’s capability for global expansion.
Some questions to ask during the planning process are:
- Is your current team committed to meeting the global challenges?
- Does your organisation have a sufficiently flexible structure to adapt to new markets?
- Do you have the financial and capital stability required?
- Is there enough demand for your product in your chosen market?
- Are you able to adapt your product/service to meet the needs of the new market?
As many opportunities as global expansion can bring to your business, without adequate planning, you could find yourself faced with unexpected costs, legal hoops to jump through and difficulties managing your team from afar.
Not having the right talent
The right talent can grow your business exponentially. Therefore, perfecting your global acquisition strategy is a must before entering new markets. By partnering with a service like a PEO, they can help your business transition smoothly in a new country, including helping you find the right talent.
Expectations from candidates vary from country to country. Having the right salary alone isn’t sufficient to attract the best talent. Without the right benefits to attract talent, your organisation will be overlooked by jobseekers in favour of your competitors.
Having the right leaders and managers heading up your global office is vital to the success of your business. Having a strong leader and a solid point of contact, especially in the first period of your global expansion journey is essential.
Not taking into consideration local culture
It’s great to carry out extensive market research. However, being aware of culture difference is essential to check whether your product/service fits with the new market, and if not, how it can be adapted.
Cultural practices of different countries can vary immensely. For example the style of handshake is different in Japan. A “firm handshake” is viewed as inappropriate, whereas in the United States it’s seen as polite. In France, it’s possible to give a quick, light handshake in every professional and private context, while in the US and UK, handshakes are reserved mostly for professional situations.
Partner with someone who knows the local environment
When you work with a PEO like Procorre Global, they are familiar with the business environment, and can navigate your business through the local legalities associated with global expansion. Get in touch with a member of our team today to start your global expansion journey.