Setting up a business anywhere isn’t a task to be taken lightly, but once you start to go international things become more complicated. While this shouldn’t be a deterrent, it’s important that ambitious entrepreneurs with worldwide dreams consider the move from every angle and plan strategically.
So before you start setting foot outside of your home border, we’ve teamed up Switzerland-based high-tech software developer Morphean and a select group of experienced entrepreneurs to share a few important things you need to think about…
Culture and collaboration
Immersing yourself in local culture is essential for any expanding entrepreneur. These people are your potential customers, so it’s important for you to foster a genuine interest in your business’ new home and its culture. So get out there and meet people and participate in experiences – the market, customer preferences and their behaviour aren’t native to you so learn as much as you can.
Mike Danby, CEO of Advanced Supply Chain Group says you can’t afford to ignore cultural differences: “Never underestimate the importance of understanding and engaging with local cultures, and don’t think learning a language achieves this. Showing an appreciation of different cultures and embracing it can prove the difference between prosperous long-term business and failure overnight. Whilst we’ll spend time researching different cultures and ways of working, we’ve found an effective means of entering a new market is to collaborate with an established on-the-ground partner. In China and throughout Asia this has enabled us to develop in-depth experience of how goods move through local supply chains including how deals are negotiated, checked and concluded. It means we can effectively move in and out of different provinces and across borders on time and budget.”
Use and grow your network
Expanding your business abroad isn’t an easy task, and it’s important that you have people in your corner. Use the Internet to your advantage before you head over there to expand on your professional network; check LinkedIn or MeetUp or see if there are any specific groups that cater to expat entrepreneurs. These people will have real hand experience of setting up shop elsewhere, and that kind of advice is truly invaluable.
“There are probably already people in your professional network who could help you,” says Rodrigue Zbinden, CEO of Morphean. “Check your existing connections to see if any of them are based in the country you are moving to. If not, don’t be afraid to make those connections and reach out to people who are already established there.
“Once you have your network, whether it’s online or in-person at a networking group, make sure you’re asking all the right questions. What can they tell you about the customers’ needs in this new marketplace? Have they noticed any major differences? How high is the competition? What are the main distribution channels that they use? How did they access them?
“While they may not work in your specific industry, people who are already established abroad will be an absolute goldmine of information that you need to be tapping into.”
Get native assistance
Especially for small businesses, where your budget for expanding may be tightly controlled, it’s tempting to try and do everything yourself. While your experience at home will stand you in good stead, once you cross borders, things start to change, especially when it comes to local laws.
Alina Cincan, Managing Director at Inbox Translation, says that it’s important to have people who know the local customs and laws on your side: “Last year, we set up a new branch for our UK-based translation business in Romania (my native country). While language was no issue, the rest of it was no smooth ride. The UK and Romania are pretty dissimilar in terms of both red tape and culture.
“Bureaucracy-wise, the main difference is the amount of paperwork (and I mean ‘paper’ in a very literal sense) required in order to set up a business. As opposed to the UK business which I set up with no external help, online, from my home office, it was a different story in Romania where I had to contract the services of a local lawyer. Just to give you an idea, according to the World Bank, UK ranks 19th (out of 190 countries) in terms of how easy it is to start a business, Romania is 111th.
“The same goes for accounting: it is imperative for a business to use the services of an accredited accountant. Even if you speak the language, you most likely don’t speak the lingo.
“Communication: while email is my preferred means of communication, those intending to set up shop in Romania should be aware that the phone is the easiest and quickest way to reach those you need to contact.
“Another significant cultural difference is addressing people by their first name – after many years of living and working in the UK, this comes as a second nature to me; however, a more formal approach is needed in Romania.
“The bottom line? Before deciding to set up a business, make sure you’ve done your research and don’t hesitate to ask for help or advice.”
Managing change and uncertainty
No business venture is without its storms, and it’s important to be prepared for any changes that may come your way. Make sure you stay up-to-date on any changes that are coming into effect, both in your country and those you trade with, and prepare well in advance if any of these will impact how you do business.
Danby weighs in again: “One of the biggest challenges facing our business is changing cross-border agreements, duties and inspections. Yes, Brexit affects these, but there are other issues like national security, smuggling and human trafficking that either directly or indirectly affect international trade on an ongoing basis. Companies need to be on top of proposed legislative changes and have contingencies in place to ensure their business adapts quickly and effectively. We’ve developed bespoke software that enables us to forecast and adjust tariffs, project management and delivery times according to different scenarios.”
Online presence and customer service
In today’s digital world, it’s near impossible to establish a company, grow it and have it succeed without an online presence. But it’s not enough to set up a website and expect business as usual, you need to be treating the customers that come through your virtual doors with the highest priority.
Lindsay Willott, CEO and founder of Customer Thermometer says that your customer service should never falter: “I started exporting pretty much within the first month of our foundation and our 3rd ever customer was a North American buyer. It can happen organically if you have an easy process on your website for US customers to order and pay for your product. Many businesses succeed virtually, so having an international office isn’t key, but that does mean that your online presence and support needs to be second to none. Customer service is the value add that will enable accounts to grow and recommendations to be made.
“Once you are established it may be worthwhile to look into recruiting some local partners that can help sell and deliver your service. They may take a cut but can prove invaluable as they will have a much bigger network and can help advise on the cultural nuances. We now have such a good base in the US that we charge for our service in dollars.”