8 Questions Before Going Global
If you are prepared to expand your business globally is a difficult decision to make. It is true that there are opportunities that pass through our table and you think, should I or should not I? is it worth it or not? How far can I go? What if it goes wrong? tempting especially when these offer come from “hot markets” such as China, Brazil, India or even Vietnam. That is why you have to pause, breathe and answer the 10 basic questions to know if you are prepared and have the necessary resources or not.
If you see that in several of the questions, you can not answer or your answer is rather negative, do not be discouraged, you simply need more time to gather the resources needed for internationalization.
Many companies, especially the youngest, are the most determined to take their products to international markets. It is certainly not bad, we simply have to study if it is being done at the right time or too soon. Indeed, exporting and selling to other countries provides a much higher sales coverage, but we must ensure that this process does not remove resources that are used to grow and consolidate the company in the market you dominate, that is, your main market.
1. Is your company sufficiently consolidated in your main market?
Your main market is usually the domestic market, the market that provides you with both economic stability and the one that allows you to carry out day-to-day operations without any problems. Moreover, a percentage of these benefits generated by this market will be allocated to the investment of internationalizing the company. If that percentage is still needed for daily management, it means that you need to wait a little longer to internationalize.
2. Is your company strong to face internationalization?
YFor the internationalization process you must assign a small team (minimum 1 person with experience) to this task. That is, can the company afford to hire one more person for this task? Or can a person from the existing staff be assigned and that person carry out that responsibility with the skills that they currently possess? This person would be responsible for marketing and sales abroad, in English “overseas and sales marketing Manager”.
3. How to find talent in other countries?
Search and find talent in foreign countries is a very difficult task. Finding people is very easy, but finding the talent, the ideal person who sees your vision and struggles for it is difficult, has certain requirements and also knows how to sell is very difficult. Here you must think: do I look for a person of my same nationality but who lives in the destination country? Or is a person from the country of destination who speaks my language better?
Who can I ask for help? Here consultants and agents come into play. They can be local or foreign, but they must know how to understand your needs and how to find local or foreign talent for your company, but all this help has a price.
If you want the advice of MLK Partners, do not hesitate to contact us.
4. Should my company adapt to the local culture?
There are countries that ask you to adapt your products and services to the local culture, that translates into additional expenses in the production of the product. In this way, in these markets, these products are more attractive to the consumer.
In case the target market does not require the personalization of the product, then at least it should have a label where the name of the product and short marketing message in the language of the country of destination correctly translated. These expenses are lower than the markets that do require the adaptation of the product, but even so it must be considered an additional expense.
It is necessary to make sure that the message is translated with the correct language and words for the product. For this task, have professionals and do not use free online translators or other means that may be less reliable.
It is very important that you have the technical specifications of your products, updated and in several languages (for example your language and in English) so that the potential customer can see how your product is and if you need a change. For example in Korea there is a list of products that are forbidden in the food, it would be necessary to look if your product contains any of these prohibited products and if not consult with the KFDA to see if your products could be exporting to Korea without any problem.
5. Do I need a partner in the destination country?
For some businesses it is vital to have an international partner, for others not. It depends on the laws and how strong your company is in your main / domestic market. The partners are usually to improve numbers, sales. But other times, these partners make your profits go down, since they could buy / import the product and even have a margin of the sale greater than your profits.
When you are looking for a partner in the destination country, make sure it exists, that you have a sales record in other similar products, that you have a good honest relationship and that you will defend your product in the target market. Also, you must control the prices sold by your competitors so that your profits are not reduced due to the manipulation of your partner.
Many companies tend to give their product exclusively to companies they barely know. Do not worry about making the decision, investigate, ask others, if you do not stay stuck with a partner that you just know and can take advantage of your company. Moreover, your product may not see the light in the target market because the partner company does not have sufficient resources and sales and distribution channels.
Recommended to use consultants and agents to verify this information.
6. Do I understand who my competitors are?As in every market, you must know your competitors. The competitors in your main market may or may not be the same in your target market. Taking into account the local product is important since it is usually that it will have more market share. Previous fieldwork is necessary, by agent or consultant for more effective and quick results. Talking with potential buyers gives important information.
7. Financing for international expansion. How to face it?
Unfortunately, internationalization rarely generates benefits from the first sale. The employer has to anticipate that there will be money invested and hopefully lose money. For that reason, you not only need capital to start internationalization, but you also need a long-term financing plan. There you can see reflected the expenses and the benefits that you are generating. It is necessary to interpret the signs of when things are not going well and close operations. But, keep in mind that many companies have to be present in a market for years to recognize the product and at a given time it starts to buy, and without capital it is difficult to wait for that moment to arrive without despair.
The capital can be obtained organically (comes from your pocket) or through loans or grants from the Government of your country. There are several channels to obtain financing but today there are many obstacles to obtain a few hundred euros or dollars.
8. What do we do with the bureaucracy??
Each country and industry is different, so when you are making the export plan you have to contemplate several points. For example, if you are not going to have a partner and you decide to have your company in the country of destination, you need an import license, rent a warehouse, and fulfill other requirements that the Government determines. This has to be determined before starting the whole process. For example, there are statistics on the internet that indicate by country how long it takes to open a business.
There is no golden rule for success, but there are recommendations for that. Have good knowledge of the country where your company wants to establish constant and regular sales, have a team and / or consultant / broker / agent to help you and be patient in negotiations. Above all, the first time when it is possible to customize the product, translate, make labels, ask for licenses, etc.
If you have basic questions about South Korea and how to export here, you can count on our online consulting service, where we can answer your basic questions to know the market and know if your company is ready to enter the Korean market. Click here for more information.