Every business starts with the idea of being a leader in the field one day. The interesting thing is that expansion has actually gotten easier when compared to the past. Sure, some aspects like the bureaucracy and paperwork have gotten worse, but in other areas, expansion has become easier.
In fact, many countries welcome businesses from outside to invest and set up operations. So, why are some entrepreneurs so hesitant? Today, let’s explore a few considerations around global business expansion.
Overcoming the Fear of Expansion
The first step to expanding is to lose the anxiety and fear around the consequences of failure. These feelings are understandable. After all, if you’ve built up your business so far without problems, the last thing you want is to lose it all. Everyone thinks that expanding involves huge capital expenditure, and a loss can be terrifying.
Yet, expansion is eventually the default path for almost every business, given enough time. As the World Economic Forum notes, 1 in 5 of ‘very large companies’ today started as small businesses. They point out that 90% of all businesses include 400 million small and medium-sized enterprises.
Expansion could be to another town or city, or it could be another country. It still counts either way. Your key objective in this early stage is to lose the fear of expanding. The fear often comes from a combination of overestimating how risky it is while also underestimating how adaptable your business is.
We mentioned that expansion is far easier today, and this is a fact. In the old days, you’d have to take so much effort in setting up a new base and hiring local staff. Today, the Employer of Record services (EOR) will do that job for you.
As Remote, a global HR and payroll platform, explains, an EOR acts as the legal local employer for you. They handle all the compliance and legal aspects that would otherwise bog you down. Likewise, there are many other services that take care of other aspects that come with expansion.
Don’t Be Shy To Take Advantage of Any Help You Can Find
Entrepreneurs are often aware of the many grants and funding opportunities that exist for them. Yet, there’s always the perception that they never work out. You’ll hear founders say things like “Oh, those are highly competitive” or “Grant funding is extremely rigged.” Yet, you’d be surprised. Since so many leaders have this perception, they don’t even try, which means better odds for those who do.
One report from U.S. Chamber magazine highlights the case of Spectrum International, a small company based in Georgia, founded in 2017. It used the Small Business Administration’s Trade Expansion Program grant and now serves over 65 countries despite employing just 28 people.
This could easily be the story of your business as well, but it involves being willing to apply for help. There are a lot of opportunities out there that are just waiting to be used. What’s more, never forget that expanding is worth the effort. As Remote notes, in many situations, it also ends up being cost-effective because you can set lower prices and reach a large audience.
You Can Expand Even Without a Massive Budget
Now, you might be thinking, what about aspects like marketing? Sure, there might be services that take care of it, but won’t they be expensive? Moreover, wouldn’t many grants refuse to cover it? You’re right. If you lack the budget, you can’t be paying massive ad firms to help you establish a presence in a new country. Yet, capturing a new demographic is still possible with some tact.
In fact, Rajeev Batra, professor of marketing at the University of Michigan’s Ross Business School, had some interesting insights to share on this. Professor Batra notes that emerging businesses need to identify and focus on market segments that have been overlooked by existing, dominant players.
He explains that these niches become safe spaces that can be used to understand your new customers. This allows you to master the subtleties of international business practice.
So, suppose you’re in the skin care business and make formulas for sensitive skin. If you were to expand into another country and directly compete on lines of “anti-aging” products, you’d get chewed up in an instant.
However, with some research, you might find that the overlooked segment is urban professionals with pollution-related skin concerns. That’s how you get the foothold, and you don’t need massive ad campaigns to achieve it.
Ultimately, expanding a business is part mind game and part preparation. Mentally, you just have to realize that expansion is often a paper tiger. It looks far more dangerous and challenging than it actually is. You have to recognize that with modern services, you really aren’t putting that much on the line.
On the other hand, that doesn’t mean you can just skirt by with no effort. Your preparation will involve a good deal of research, especially if you want to keep costs down. After all, the fewer mistakes you make during expansion, the more you get to save.
