Growing a Global Business: Is Your Business Ready to Take on the World?

For many entrepreneurs, it's not enough to create a flourishing local business--they want to grow their businesses internationally. If going global interests you, are you willing to cope with the many challenges that come with doing business across the world?

Here are seven questions to ask yourself to see if you’re ready to go global:

1. Will your product sell as well?

High demand for your product in your country does not mean that your product has universal appeal. You have to do some research to get the answer. It’s not about making an educated guess, either. It’s about gathering enough information to be able to predict with a high level of certainty that your product will do well elsewhere.

How do you conduct this research? Start with academic research—reading books, checking out websites, and speaking to people who come from the country you’re interested in marketing to. Then, go visit the country in person.

There is a huge difference between armchair research and actual experience. Even if you do hire a firm to do preliminary research for you, you should still pay an actual visit. Sometimes statistical information is not that accurate as it may be based on a limited sample. Personal experience with the culture and exposure to social norms will give you a good idea about whether your product will sell well.

2. Do you understand the differences in marketplaces?

A foreign market may not do business in the way that you’re accustomed to. Make sure that there is a high enough level of compatibility between the business environments and industries for your product to be well-received. You also need to consider practical issues like working with different currencies to make or collect payments, which might require solutions to handle payment processing. In short, find markets similar to your own rather than experiment with untested markets to see what might happen. The more compatible the market, the easier it will be to make a transition.

3. Will you err on the side of conservatism?

Sometimes we make decisions based on pessimism or optimism. If possible, look for more information before you make a final decision. The reason to err on the side of conservatism is that it can be very expensive and time-consuming setting up a business in another country.

There is a famous joke about Bata Shoes sending two salesmen to a rural village in Africa. They both sent telegrams home. One salesman wrote, “No market here. The people don’t wear shoes;” the other one said, “Great market here. The people don’t wear shoes.”

4. Do you have enough available resources?

Do you have enough capital, staff, and business connections to expand your business? If you are doing well locally but don’t have surplus resources, then you will overextend your resources when building a business overseas. Not only will your overseas venture collapse, but you will also compromise your local business which will have too few resources to continue to function well.

5. Can you overcome language barriers?

The marketing that works so well in your country may fall flat in another country. Your ads won’t translate. Your pitches will sound odd. Your effort to create humorous ads may be met with total incomprehension. What’s more, you can’t send your best salespeople there either—because they won’t be able to speak a word. It's not just the denotation of words that matter, but also their connotations.

Language barriers aren’t insurmountable, but they can be awkward if you don’t work with an excellent linguistic service.

6. Do you understand the culture well enough to avoid embarrassing mistakes?

Even if you can overcome the language barrier when starting a business overseas and can successfully get your marketing messages across, you also have to navigate cultural values. What may appear to be insignificant to you may be significant to another culture.

An example is the difference between working in northern Europe and southern Europe. In northern Europe, you will be respected if you start a negotiation by cutting the small talk and getting straight to the point; in southern Europe, you are considered brash and impatient if you start a meeting without small talk.

7. Can you beat the local competition?

Although you may consider the quality of your products superior to your competitors, the local people may think otherwise. In many ways, you may have to alter your product to suit their tastes. You will have to solve your sales challenges with some creative thinking.

Best practices

If your business is going to be successful in another country, you need to understand the culture at a deep level. If you don't, you won't know how to negotiate and close contracts, and you won't have a clue about best practices.