by Nigel Peters0
Tips For Growing Your Business Abroad
First and foremost as growth returns, my mantra is keep to conventional business theory (see Ansoff matrix below) and always do the easy things first. If that means that, like most markets in the UK, you are seeing some green shoots them prosecute these in the first instance. Keep to the fundamentals. But how do you go about taking advantage of the upturn in another geography?
Find great people
Without getting too theoretical, I will share with you some of the lessons we have learned from setting up with our team in Buenos Aires. In terms of picking a global geography with tough challenges and a difficult political environment we couldn’t have chosen many more like this one! Raging inflation, the second term of a political party that is waning in popularity and economic policies that drove the nationalisation of European assets don’t make for easy reading. But we still decided to go with it. Why ? Because we had found great people to lead the venture. After three impossibly difficult years they are still committed, enthusiastic and driven by the need to make a difference in Argentina and the wider Latin American economy. With the current default as a backdrop and elections on the horizon, our team will see through this difficult period and be all the stronger for the upside. So if you have great people you can do much. Our team are ex investment bankers, with a great network in Latin America and a deep understanding of the regulatory and general business environment. So make sure you have that deep understanding of the environment before taking those steps. A traditional PESTEL analysis (below) will go far, but a team that have worked in the environment for 20 years brings untold levels of insight.
Use in-country resources
Remember to try and keep it local as much as possible. Tim Nash, an expert in this area, especially when it comes to doing business in China, advises to ask yourself the simple question: “Who else is going with you?” This question is about leveraging whatever resources/connections/grants/introductions etc. that might already exist in the territory for your company. The other side of this question of course is: “If there aren’t any other British companies there already, why not?” It is not just the commercials of the business that are exposed when you go into a new territory. A new player on the block is one thing; a new nationality on the block is quite another.
Listen to the market
Always ask the key question: “What does the market want?” Here we had a tough start. The regulatory environment in Latin America does not align to the use of ‘interims’ in the same way as the UK. So the business model had to be adapted to enable it to work. It was a real case of listening to the market, talking to the right people and matching their needs - not just pushing a product onto them, especially when it doesn’t align to the market environment.
Align processes and structures
Next to consider is good brand, processes and infrastructure. Having these in place, in our case through a franchising business model, saved some 12-18 months for the team. They already had a CRM system, some international talent pools and, most importantly of all, the contractual basis and documents to operate - although these had to still be adapted to the new location. From a brand example, we have a great website and it wasn’t too difficult to get it translated into Spanish and Portuguese so the team can now use it locally.
Finally some good old fashioned business luck. Getting away with a few quick wins, some early cash flow and a tight handle on the cost base are all essential elements of success. International business tourism can quickly become alive and well and before you know it, you will have spent 12 months profit and have little to show for your efforts . Don’t underestimate how long it will take and the effort and cost required to establish a venture in a new environment.
In sum, a new geography, while essential for diversification is a big challenge. Great people with the clear understanding of the needs, quirks and challenges are essential. Taking Business abroad is not for the feint hearted.
Have you had experience of operating in an overseas market? What are your top tips? Share your thoughts below.