What Businesses Need for an Export Push
October 8, 2015
What Businesses Need for an Export Push
If you’ve continued to read Spark each week, you’ve got a pretty good idea of the opportunities available for your business in the United States.
Many businesses get so excited during expansion, they often do not fully define and articulate the reason for expanding abroad. This can prove to be a misstep. It is a fundamentally different undertaking if your reason for expansion is to serve your already existing customer base better, or to fend off stagnating growth in the U.K. marketplace.
Read on to see three key areas companies focus upon when planning an expansion.
1) Company Focus
This part is simple. Has your company clearly defined its business, to the point where it can state its purpose in a single strong sentence? Yes, your business probably will have a more expansive description in its executive summary, but you need to open with one simple declaration to show the clarity of your vision for the business.
What are the main dynamics of a company? Simply put it is two components: a sellable product/service, and a management team that can run the business well. Investors and funding sources want to know that the company has created unique solutions superior to their competition. And that the management team consists of smart people able to deliver products/services to their customers, control expenses, and make repeat profit.
Expanding an Internet business to the U.S. can reap huge rewards—321 million potential customers, a secure and stable business infrastructure, and some of the richest individual economies in the world are all arguments. Be very specific not only where and how you want to expand, but also be clear about the underlying reasoning. This will help you to develop a tailored market entry strategy, and help to set the right expectations to customers and stakeholders.
2) Market Potential
The company has a large existing market for its products and services. If your company does not have significant growth potential, then it is probably not going to be of interest to new audiences.
Of course, if you’re reading this, then you’ve already done this portion of the homework, and are more than ready to bring your offerings to U.S. audiences.
Reduce the risk of any surprises coming up once you entered a new geography by conducting thorough market research. Often expanding companies are surprised by competitors who suddenly evolve from seemingly out of nowhere, or the impact of local regulations that could have easily been missed beforehand.
Consider not only researching the companies you see as direct competition, but also the companies which those competitors would also see as rivals. Understand the needs and requirements of your customers before you expand into their market. Make sure you fundamentally understand the legal and business framework in your target market to minimize the risk of costly surprises.
3) Specific, Targeted Solutions
The company has identified what its customers most need and has created a value proposition for them to make it a simple “buy” decision. If there is nothing unique or distinct about your company’s products/services, then you do not have a defensible position in your market. Defensibility of your market position is of key importance to investors and funding sources.
We might be a global economy, but U.S. customers still prefer “local” business. People prefer to interact in their own language, conduct transactions through their local payment services, receive support during their normal business hours, and work with products which serve local business requirements. Look at your business from all of these angles and understand what it means for you and your expansion plans.
Do you have all the pieces in place to fulfill local needs? Speak to your potential customers and try to understand their concerns:
- How do they like to do business?
- What makes them buy your product?
- What do they like (or dislike) about existing solutions?
In an ideal situation, your customers have a recurring need for these products and/or services, with a reasonable sales-cycle and opportunities for upsell of value-add products and services.
If your market is more suited for long-term development, then your company will need to prove it is truly a disruptive business model that will have people flock to it once it is functional.
Time and time again companies try to do everything at once, in an effort to be first to the marketplace. As important as it is to be the standard-bearer, it proves to be even more important to do things right and in the right order.
You will not win any sustainable business simply because your operations have potential to grow through marketing and sales. This means nothing if your new customers don’t receive adequate support for their own needs, in a timely manner.
Take one step at a time, allow your organization to grow into its new U.S. market, and soon you’ll see how a steady, measured plan to expand leads to growth and success on both shores.