⬇ Download the eBook: The art of expansion: How to take your business to new markets and all you need to know
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When one starts a business and sits down to chart out a path for growth, the first thing that is looked into is an expansion plan. A business without a possibility of expansion has either not realised its full potential or is not on the path to success.
Once the expansion element for a business is determined, the journey to new territories starts. Thereafter, all the strategies and visions are weaved around the potential to expand and enter new markets in search of new customer bases, more sales revenues, or simply greater outreach.
Expansion is often seen as synonymous with growth, and growth opportunities are what one seeks to flourish and prosper. It would not be an exaggeration to say that the ultimate goal of all businesses is to expand.
As per a recent survey by Deloitte, the fourth industrial revolution is creating opportunities and growth, thereby offering expansion possibilities.
“Industry 4.0 offers potential for growth by creating new revenue streams, opening up new distribution channels, streamlining design and manufacturing processes, or creating innovative products and services. Harnessing technology advancements for growth is key, but it can be challenging considering how quickly new technologies are emerging and being adopted, disrupting current business models, “says an article by the consultancy.
So how does this journey of scaling up start?
Leading your local market can be a short-term goal but is definitely not the final destination that you should settle for, especially if you’ve managed to excel in your home ground. A local market has its own limitations, and hence it is easier to reach the level of saturation.
This is when this voyage should be flagged off. In any case, in recent times, it has become even more essential for a business to think of a global presence. So, although a lot of factors hint towards expansion, it is not a decision taken in haste or without much thought.
If you have been considering taking your business global, there are some vital questions you should ask yourself before starting.
1. What benefits is your business looking at with the new expansion?
2. Is there a demand for your product/idea/service in the new market you are seeking to enter?
3. What are the things you will need before you take your business to the new market?
4. Who are your potential new customers?
5. Why, when, where, and how will they buy the product or service? What will be the channels of distribution?
6. Are you sure there’s a demand for the new product or service at a profitable price?
7. And last but most importantly, who will be your local partner in the new market for initial guidance and navigation?
Once you’ve got answers to these questions, you can sit down to evaluate the WHYs of expanding to a new market. Remember, expansion not only widens the horizons for your business, but it also opens a plethora of opportunities for it to find a purpose and work towards a greater goal of serving humanity.
Also read: Why you should consider entering new markets to increase sales revenue
One of the best favours you can do to yourself if you are associated with a start-up is to learn! Learn from other start-ups that have seen the phase of growth and expansion. In one of our previous blogs, we talked about 10 global start-ups that have important business expansion lessons for you to learn from.
The featured start-ups have had their share of challenges, failures, and hiccups before they climbed the peak of success and made a niche for themselves. One of their major goals in this journey was an expansion with an overarching vision of diversifying their customer base.
The list mentioned startups from the Middle East, including Swvl, Speero, Kitch, Mabaat, and One Moto. It also included a list of internationally renowned start-ups such as Applyboard, based in Canada, Moglix, based in India, Stripe, based in the USA and Ireland, Recharge, based in the Middle East, and Chipper, an African financial start-up.
Also read: 10 start-ups to watch out for valuable lessons in expansion and customer diversification
For any enterprise to succeed, it’s vital that every penny that goes into a venture is accounted for, all plans that are formulated are delivered when implemented and, above all, an ideal partner is chosen for business expansion.
All these factors become all the more important when a business, especially a start-up, forays into the uncharted waters of foreign lands and attempts to expand its commercial footprint and create a niche for itself. Whether the endeavour is successful or falls flat largely depends on how well and quickly the new market is understood and exploited optimally.
In today’s highly competitive economic environment, claiming a share of the market pie, especially when it’s new and unknown, can be a daunting task for any business. Right from the first step of registration to fulfilling official obligations, to marketing and networking, to understanding cultural differences and reaching out to the right prospective clients, all aspects need meticulous planning and execution.
For this, a company has two options: either go alone in ticking all the right boxes or forge a strategic partnership with a reliable, reputable, and resourceful local partner who can handhold it through the required procedures.
The first option is fraught with danger unless, as a business, you are 100 percent confident in making the right moves in unexplored territory. A wrong step will lead to another and before you know it, you will be caught in a complex web of unnecessary requirements, compliance issues, and everything in between. Consequently, all plans will be derailed and a huge amount of capital will go into bringing things back on track.
The second option of joining hands with a reputable and successful local company can save a firm from teething problems and help ensure it just focuses on what it enters a new market for exponential growth and more business opportunities.
The Seed Group, for example, over the past 16 years, has formed strategic alliances with leading global companies looking to accelerate their sustainable market entry and presence within the Middle East region.
The Seed Group is a notable diversified company operating in the technology, healthcare, tourism and hospitality, and real estate sectors in the Gulf region. Established business groups, such as Seed Group, give international companies the opportunity to access top decision-makers in government as well as private sectors, reach out to prospective clients and market their products effectively in the new region of operation.
Bringing on board an experienced and well-established local partner can, in fact, fast-track a company’s business expansion plans in any country and save it from unwanted expenses that can run into millions in the following areas:
Adhering to the laws in the country of operation is of utmost importance. No matter how promising a business is, failure to fulfil the local legal requirements can clip the wings of an establishment even before it has taken flight.
For example, there are certain geographical and ownership limitations in the UAE, besides opting for the right licence to operate and securing an investor visa. The right partner can save an international company from all the hassles of local labour laws, documentation, and approval procedures. The local partner’s understanding of governmental compliance and local regulations saves a foreign company from unnecessary future litigation, which is time-consuming and money-draining.
What may be right in one country is not always acceptable in another. For example, life and business manners in one country are different from others. In the Middle East, for example, Friday and Saturday are weekend days and Sunday is the first day of the week. These may sound like small differences, but they are important when it comes to business.
Therefore, a reliable local partner can help an international firm plan advertisements and official statements that are in consonance with local religious and cultural belief systems. The last thing, as a business, you want to do is hurt the sensitivities of a community or religion due to your lack of knowledge of cultural differences. Building a brand image takes millions, repairing a tarnished one even more.
An experienced local partner, preferably one with diverse business operations, has a better understanding of demographics, customer preferences, and buying habits. Based on its years of operation in various markets, the local company can help a new firm determine the right target audience to pitch its products or services for the best results.
Experienced local partners also boast a rich, widespread network of clients, which includes big names from governmental and private entities. A strategic partnership opens doors to utilise this already established network for direct marketability of products and services to grow the clientele.
There are so many businesses entering the market and eyeing their fair share. Clients are always wary of doing business with new entrants as they are not sure whether the requirements and standards will be met. However, if a new company is already in collaboration with a well-established big group or entity, prospective clients’ fears and skepticism are assuaged.
The new firms can ride on the credible image of well-known companies and mitigate whatever apprehensions prospective clients might have. Local partnership thus lays a path for a new company to not only find a firm footing in the new market but also build a strong image and reputation, a process which otherwise takes a lot of time and huge investment.
One advantage of globalising your business is access to a wider and vast pool of talent. Once in a new country, hiring international talent will bring about many benefits. This means not only will you get a workforce with advanced language skills and diverse educational backgrounds, but you will also be able to hire and work with local talent that will add up to your overall bottom line.
There is no dearth of talent in today’s digital-driven world, but finding the right people to run your company and contribute to its success is important as well. A talented workforce can play a key role in making any company successful and take it to greater heights.
In the world of the internet and smartphones, it is easier to learn things, and hence, individuals opting for upskiling and polishing their skills can be found in abundance. Furthermore, as the company grows, the possibility of finding a suitable talent grows.
Also read: How to gain a competitive advantage by managing your talent effectively
Take the UAE, for example. The UAE’s leadership has recently announced 13 projects intending to increase the number of Emiratis in the private sector by 75,000, by the next five years. This announcement should be considered one of the most important decisions taken by the UAE Government in recent times.
With 10 percent of private-sector organisations’ workforce as Emirati, sectors like technology, healthcare, and tourism are in for big benefits in terms of talent acquisition and retention. A welcome move, indeed, and one that is set to define the growth of the UAE’s economy in the years to come.
This is one decision that is an example of how any business expanding to the UAE can benefit from a local workforce that is already a mix of professionals from around the world. The same applies to other countries you might consider expanding. It is good to do your homework and research how the new country you are expanding to can add to your human resource and talent acquisition abilities.
Also read: A preparation for the future: ‘Principles Of 50’ charts out a progressive roadmap for the UAE
Expansion is an art and an essential one. For any business to flourish, expansion is a vital step. Especially in today’s fast-changing and pandemic hit world, the need for businesses to be global has increased dramatically.
It is therefore the right time to make the move and consider global expansion, as it has endless benefits, from acquiring a new customer base to taking your product international, to having a global talent pool, and so on.
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