Expanding into New Markets: Opportunities and Challenges for SMEs
The last couple of years has seen even more small-to-medium enterprises (SMEs) expanding an business into international markets. The pandemic may have slowed this down a little but for many companies these expansion plans were not particularly hampered. Of course breaking into an international marketplace isn’t without its pitfalls and never more so than for the SME. Here, we explain the benefits of expanding your business and how to do so safely.
The challenge worth overcoming
It’s a bit like starting your business all over again when you expand into a new country. There is a need to raise awareness of your brand, develop a new customer base and then there is the culture and the market which can be completely different from anything you have previously experienced.
When you have the right the right tools, planning and dedication to what you are doing it is possible to adapt to any new markets. The rewards will be worth it despite the challenges you may encounter along the way.
Research
As with setting up a new business, research is vital. You will need to look at the demographics of the area you are looking at targeting so that you can tailor the business strategy you opt for most effectively.
One reason many SME’s want to expand in this way is to help extend the life cycle of any current products that they have, particularly if they feel they have saturated the home market. This doesn’t mean however that you should avoid doing the right research and due diligence. Your product may not hold the same value in another country as it does at home , or the market may already be saturated with simillar products.
Plan
Plan, plan, plan – before you even think about entering a new market you need to put a lot of work into your plans. You should also undergo an extensive audit of your business and carry out market analysis whilst considering your strengths, weaknesses, opportunities and threats. Taking time over this initial stage will reap you better rewards in the long run.
Navigate the complicated process of expanding your business
Setting up subsidiaries in each country would be the traditional step, this is expensive, lengthy, and required the set up of things like payroll, human resources and local knowledge. His can be stressful and opting with work with an Employer of Record (EOR) can be a wise move. They can help you grow by managing many of the complexities for your business expansion.
Cultural differences
It is important to consider cultural practises and differences when looking to break into a new international market. It is essential that you understand these often subtle cultural nuances if you want to be successful. This is another area where you should do some research. It is also important to look at the language differences and how they might impact your business. This is one area where the services of a local expert may prove invaluable.
Keep your business on track
As with any new business it is really important to keep your expansion on track, this may be harder when you are further away, but short term goals and regular check in’s will really help as will having a good team in place.