Overseas markets are more attractive than ever for small businesses who now have access to the latest technologies to reach growing affluent populations in countries like China and India. But deciding if and when to expand overseas is a tough call, especially if you have a young family.
Expanding your market reach doesn’t automatically equal expanded profits – it can of course – but make sure you ask the right questions and that it’s the right timing for you and your family. In addition to the business issues, there are plenty of personal items to consider in terms of your well-being, managing your time and stress, as well as making sure to factor in some time with your family!
So is the timing right for you business-wise? Here are my five tips on areas which you can investigate and research now to help answer that question before you outlay any capital.
- Consult government organisations – The Austrade website www.austrade.gov.au/export is a good place to start for helpful information, including country profiles, reporting obligations and market opportunities. The Austrade Trade Commissioners overseas are also invaluable sources of information and contacts.
- Join a business association – their programs and sessions can be a great way of gaining market insights and contacts overseas. Accru can connect you with various associations including the German-Australian Chamber of Commerce, Australia China Business Council, Australian Tamil Chamber of Commerce and Australia Malaysia Singapore Association. These groups are all well worth approaching for local advice and building your overseas connections.
- Study the market – Look at the marketplace you want to go into. How will you adapt to the local culture? Have a look at your local competition. Who’s already there? What are they doing – right or wrong? Is there a spot for you? Do you need to adjust your product or service to meet local customer tastes? Does your marketing message translate to the local language? The more familiar you are with the country’s local demographics, the easier it will be to determine your market and promote your brand. Spend some time abroad and speak to potential customers to avoid costly mistakes.
- Start small – Identify which of your core competencies make the most sense in a given country or region, rather than trying to duplicate your entire domestic operation. Expansion is almost always accompanied by increased expenses. Test the waters before you jump in head first! Start with one or two key goals for your business in a small slice of a foreign market so you can manage growth and easily evaluate your success along the way.
- Examine your finances and consult your bankers – Finance is always a big challenge – entering a new market is risky and usually requires a big capital outlay before you start seeing much return. Have you got the required extra funds yourself or will you need investment or loans to support the expansion? Be honest – could these funds be better used towards developing your local market, rather than expanding overseas? Think about your exposure to exchange rate risk, and how you can ascertain reliable credit risk information from new customers, to protect yourself. Letters of credit – or other trade financing instruments may provide a solution.
Next article I will look at the financial and business setup issues involved – eg company structure, tax, contracts, government grants – for those who are closer to deciding to take the plunge overseas. There is also lots of useful information on Accru’s International business blog and on our Accru Asia website
In the meantime, if I can point you in the right direction of any Accru Felsers overseas partners or business associations in Sydney that may be able to assist you, please get in touch.