International expansion can be a smart step for businesses of all sizes, but deciding when and how can be challenging.

One of the primary goals of any business is to provide an excellent product or service that attracts customers and brings in revenue. However, as your business establishes itself in the market successfully, you may begin to wonder about the next steps. While some small businesses thrive for decades without significant changes, most will find that growth and innovation are vital for long-term survival.

Taking your business global can infuse your company with an expanded customer base and increased profits. But the process might seem daunting, especially for small businesses. We’ve spoken to international business experts to get advice on when you should consider expanding internationally and the steps to take to make your company a global hit.

STEPS TO EXPAND INTO INTERNATIONAL BUSINESS

1. Evaluate your current business before expanding internationally.

Before investing time and money into foreign market expansion, you must evaluate your current operations carefully. Expansion requires a significant investment of resources, so you must ensure your business is well-equipped. To make it internationally, your business should be established firmly at home. But expanding to a new market, even if there is demand, doesn’t necessarily mean replicating success is guaranteed. A successful expansion requires evaluating all operational components.

2. Conduct careful research into the countries where you want to do business.

Once you’ve determined that your company is ready to go international, it’s time to research the countries where you hope to do business. Detailed research is essential because you’re starting from square one in a place where you have no experience.

Thorough research is crucial to understanding the economic and political situation of the countries you consider. The right conditions could make a territory a prime choice for expansion. Meanwhile, poor conditions, even in a country with a high demand for your product, signal you should think twice.

Market research will help you determine where your product’s demand exists and how you can successfully connect with potential new customers. Research should also shed light on demographics and the cultural norms and preferences that could impact your expansion.

3. Focus your efforts on specific locations.

Research is critical for understanding what it takes to expand to a foreign market and can help you determine where your product or service might succeed. However, the scope of your expansion depends on your goals and your current business’s size.

Expanding to every market where you could potentially succeed doesn’t always make sense. Narrow down the countries and territories you’re considering based on your research. For example, choose a location where you won’t face competition or a nearby country that allows you to use your current suppliers.

When you focus on markets that will be easy to enter and thrive in, you set yourself up for continued growth and future expansion.

4. Consult with experts about your international expansion.

It’s never a good idea to go into a new business venture blind. Speaking with experts can help your international expansion go off without a hitch. You should also reach out to organizations in your home country that have established business and political relationships with the country where you hope to expand.

5. Understand cultural differences in your expansion location.

Different countries operate within different cultural norms. To expand successfully, you must understand the specific nuances of the environment where you will operate. That means learning the local people’s beliefs, history, tastes and preferences.

Grasping the local culture will help shape your business strategy, including dealing with partners and communicating with the public. Neglecting cultural differences and committing international marketing mistakes could spell disaster for your brand ― even at home.

The local culture will inform your operations and day-to-day personal interactions. Understanding international business customs will help you build relationships with local partners, suppliers, gatekeepers and employees. It will also help you avoid misunderstandings that could stop your expansion in its tracks.

6. Adapt to local markets to reach your target customers.

You must adapt to reach your target customer in a foreign market. That means doing more than translating your existing marketing content into the local language. Adapting can mean making changes to what you sell. For example, translating a product name literally may result in unfortunate connotations in the local language. You must also pay attention to what people love and what drives people away and adapt your products accordingly.

7. Follow local regulations in your new market.

One of the most complex aspects of going global is ensuring you adhere to local laws and regulations. When researching a target country, compile a list of the documentation you’ll need to open and run your business. You should also familiarize yourself with labor laws and regulations before hiring new employees. Pay attention to wage standards and other legal requirements you must comply with, including health insurance or paid time off.

Tax requirements are another crucial consideration. Beyond understanding what taxes your business will pay and how to withhold from employees’ wages, you should study how operating in another country can affect your business taxes at home. When in doubt, consult a specialized attorney to help set up your business’s legal structure in the new country.

8. Build an international team.

People are vital to any prosperous business. You’ve surely invested time and effort in fostering a company culture at home that attracts top talent and brings in loyal customers. Replicating that culture should be a priority as you build your international team.

Company leaders should be able to effectively train and communicate with local employees, respecting cultural nuances and business norms. Dedicated local employees are a valuable resource and can help you connect with the local culture and build your reputation. Your business should also develop relationships with local partners, suppliers and government officials.

Micah Shepard, CEO of Schaeffler Asia, says finding local partners benefits your business by providing a deeper understanding of the market you’re entering. It may take some effort to find and develop these relationships, but Shepard said that “connecting with the local Amcham [American Chamber of Commerce] could be a good starting point for finding a good partner.”

9. Make detailed plans for your international expansion.

After researching the country where you plan to expand, considering local laws and culture and building relationships, it is time to set concrete goals and write a business plan.

Still, every strategy should be as detailed as possible. That means considering every aspect of how you will operate in the new country.

10. Prepare for challenges amid your international expansion.

Growing your business globally can be highly beneficial but it’s also risky. There are many upfront costs and if things go south, you don’t want your business at home to tank.

“Remember to keep some buffer, as there are always unexpected costs and challenges when starting up,” Shepard advised.

While you can’t always predict economic and political fluctuations abroad, you should ensure your company can withstand the cost of failure abroad.

HOW TO KNOW WHEN TO EXPAND INTO A NEW COUNTRY

Deciding to go global can seem even more challenging than the process of expanding abroad. The experts we spoke to agree that it isn’t the size of your business that matters. Your business’s strength, status in the domestic market and long-term goals are critical.

Consider the following to ensure a global expansion is the right move.

1. Do the benefits of global growth outweigh domestic opportunities?

If there’s still domestic growth potential, including expanding to another state, focusing your resources at home might make sense. Establishing operations in a new country is challenging and expensive and, as Kwon pointed out, there are usually fewer hurdles domestically.

Global expansion may be the right move if you’ve reached market saturation, you’re facing increased competition or you’ve discovered an untapped market where international demand would bring in new customers and increased revenue.

2. Is your business strong enough to support global expansion?

Several tools can help you evaluate your business to determine if it can support an international expansion:

• Strengths, weaknesses, opportunities and threats (SWOT) analysis: A SWOT analysis can help you decide if your business is ready to expand globally.
• Political, economic, social, and technological (PEST) analysis: A PEST analysis helps you understand how external factors in a new country will affect your company.
• Competitive analysis: A  competitive analysis is another essential tool to help you see how you stack up against the competition abroad.

3. Do experts agree a global expansion is the right move?

Sometimes, the best way to know if international expansion is right for your company is to consult an outside expert.

“I would suggest [a] third-party assessment,” advised Kyle Jones, co-founder of iCRYO. “If you’re thinking about expanding, but you’re not sure if you’re ready or not, hire a third-party company to assess your ability to expand.”

A third party with experience in international growth can determine if your company has what it takes to make it in a foreign market. If you’re not quite ready, they can help point you in the right direction.

TIPS FOR SUCCEEDING INTERNATIONALLY

To ensure your global expansion goes off without a hitch, consider the following tips.

1.Ensure you’re ready for international expansion.

If you want your international business to succeed, you must ensure the timing is right. It’s a massive undertaking with much at stake, so you don’t want to rush into it before you’re ready.

2. Start off small in the new country.

Operating in a new country requires a significant investment. Understandably, that might put off many small business owners without millions in the bank. Fernandes recommends starting small by breaking into the market through online retail. You can reach customers and determine demand without shelling out a lot of cash.

3. Go global but act locally.

Repeating your success in another country isn’t as simple as making a carbon copy of your operations and translating them into a new language. If you want your product or service to be a hit, you must tailor your offering to the unique needs and customs of the people you are targeting.

4. Rely on people in your global location.

People are your greatest asset when bringing your business abroad. Locals understand the culture and how business works in their home country. They can help you navigate tricky issues you may not be aware of or understand.

“It is important to avoid making assumptions and to invest in building strong local networks and partnerships,” FCN advised.

Developing relationships with locals, whether employees or partners, will root your company in the new market and help it thrive.

LAY THE GROUNDWORK FOR TOMORROW

International expansion is a logical next step for many businesses, from small operations to large enterprises. Growing a global company leads to new customers, increased revenue, further innovation and a burnished reputation.

Even if you’re starting small in a tiny market close to home, take the time to research and plan carefully. The work you put in today will pay off later as your company’s international presence increases. Leading your business to international success is a sure fire way to ensure your company sticks around for the long run.