The Complete Guide to International Business Expansion
5: Business Expansion Plan:
Because each country has differences in terms of economy, culture, market conditions and government legislations, your business expansion plan will need to be specifically tailored to the context of the country you plan on expanding to. This business expansion plan will need to be able to drive the growth of the new business location while remaining integrated with the general corporate strategy and objectives.
Much like the business expansion strategy, your business expansion plan will need to be specifically tailored in order for it to be efficient, a business expansion plan is therefore different from one company to the next. However, there are different components to a business expansion plan that you will need to include if you want to make sure it is going to be the best it can be. Here are 10 important components that will need to be included in your business expansion plan:
1: Executive Summary:
Your executive summary will outline your entire business plan from beginning to end, and will therefore serve as a guideline moving forward. In order to make sure you have the most efficient executive summary, keeping simple and straightforward will be necessary.
2: Company Description:
The company description is where you will describe your company, what it does but also how your product stands out from the competition on the market.
3: Product and Service Description:
This is where you go into further details about your products. Describe what they do, but also what kind of customer pains they get rid of.
4: Marketing Analysis:
This section is to outline information about the market you are going to be in, as well as your current place in said market and the technology associated with business expansion.
5: Marketing Strategy:
This section will allow you to determine which marketing strategies will allow you to be successful. You will need to include advertising, new product innovations, customer experience, ideas for marketing success and technology.
6: Organization and management:
Thinking about the organization of your company and the way it needs to be managed needs to be included in your business expansion plan. It will be important for you to have the best structure possible for your company, because it will allow the company to perform to its fullest potential. Remember that a structured and organized company has many benefits included easier management and a more motivated workforce, which will ultimately increase the performance and revenues of the company.
7: Day-to-day operations:
Analyse your daily operations and look at how they work. Pay attention to what works and how you will be able to implement it once you expand, but also what works less and how you can improve it once you get to your new country of business.
8: Financial History:
You will need to find out the successful campaigns that resulted in you wanting to expand. Give some details regarding these campaigns and how they transformed your business. Do not forget to include the budget increases and cuts and how they have affected your ROI.
9: Financial plan and projections:
There are several things that need to be included in your financial plan, such as:
12-month profit and loss projection
cash flow projection
cost analysis
3 year outline on how to retain productivity
Estimated balance sheet of expenditures
10: Appendix
The appendix is often an optional section in which additional information are included. In the case of a Business expansion strategies, you can include an appendix in your plan to add information that build your case, such as:
Resumes (your own and maybe one of a co-founder if you have any)
Permits
Leases
Contracts
Brochures
Blueprints
Industry studies (cited)
Letters of support
6: Mistakes to avoid:
Once you put your business expansion plan and strategies together, there are still a few things you will have to go over in order to make sure that you are going to have a successful business expansion. Remember that it is better to be over prepared than underprepared, especially when it comes to undergoing such an important project with such stakes for your company.
Here is a list of some mistakes to avoid when expanding your business to a new country:
1: Your employees:
Very often, companies who expand want to hire younger and less experienced employees because of less expensive cost. However, this is a mistake you should try your hardest to avoid. We understand that sometimes your budget can be a little bit limited, especially when undergoing a project as big and as costly as expanding your business to another country. However, you need to understand that the skills, expertise and experience of your employees is not something you want to be cheap on. Having the right employees is one of the most important thing you can spend your money on, since it directly affects the performance and ultimately the revenue your company. While it might cost you a bit more, hiring the best people you can is an investment that is going to pay off in the long term.
2: Not designating a remote decision maker:
It is important for you to leave some independence and autonomy to your local team while still being closely involved with them and making sure that they are still working towards the company’s goals and objectives.
In order for you to let your local team have autonomy so that they can grow on their own, it is going to be primordial to have a solid management team on which you can count on and trust to do the job properly. Hire somebody who you think is going to do the job well and when you do, make sure that person understands when to make decisions and when to consult you and the upper management. Having one decision maker will streamline the process and will allow for a better-ran company, which increases the overall performance.
3: Not visiting enough:
Remember that as the boss, you have an influence over your employees by the way you do things. Be the right kind of leader, especially when it comes to the early stages of your expansion. While we have established that it will be important for your local team to have some sort of autonomy, the importance of still being involved and present remains. Even when you are not in said country, communication remains very important. You need to be aware of what your local team does, how they are currently doing and whether or not they are still on the right path towards achieving the company’s goal and even scheduling weekly phone or video chats is enough to do that. You should also use these calls as an opportunity to build and strengthen the relationship you have with your local team because remember that the better the relationship, the more motivated they are going to be.
When visiting, think about offering advice and listening to concerns your local team may have instead of only criticizing and being negative. Use this time to also support them but also learn from them and their experiences. Very often local teams have more insight regarding the market they are in, and have a better understanding of the environment and the customers. Do not be scared to listen to and even ask for suggestions, your employees might have an idea that will improve the company’s operations.
4: Going abroad for the wrong reasons:
Very often, companies decide to expand due to the lack of growth in their domestic market. While international business expansion is certainly a good way to increase your revenue, you need to understand that expanding to another country is more of a long-term investment rather than a quick way to get money. It generally takes years for you to gain profit from and you will need to be aware of that before even starting your expansion process and decide whether or not it was worth it.
Think about whether or not you can be patient and are willing to get into this long-term project and if not, you might consider giving up on expanding.
5: Poor preparation:
When expanding, the best thing you can do is to prepare yourself early on. As we mentioned several times in this guide, it is better to take your time and be certain to be prepared than rushing and not being as prepared as you could have been.
Poor preparation also involves not having the right kind of help. Indeed, we would strongly advise you to work with consultants specialized in expanding globally to properly prepare yourself. In the article '4 Tips for Expanding Your Business Globally', Nathan Resnick mentions Pura Vida Concepts as a Singapore-based consultancy focused on helping small businesses around the world expand into all parts of Asia. In order for you to be as prepared as possible, it would be advised to find consultants specialized in expanding into the country you want to succeed in and listen to their advice on what to do in order to do it successfully.
In order to make sure that your business expansion is going to be successful, you will need to prepare yourself as soon as possible. Knowing early on that you are going to expand means that you have more time to think about your strategies, do the research and do the other groundwork necessary that will determine the future success of said expansion.
