Fresh methods to expand business overseasEmma
At some point in time, most successful businesses consider expanding their business and service offerings overseas or into Africa. Both types of expansion present challenges for the company, but the key to success is knowledge and insight, coupled with an understanding of the business practices in the countries to which the expansion is targeted. Expansion into these territories is not a decision to be taken lightly.
With the weakening Rand, entrepreneurs are setting their sights on alternative markets for their business success. The biggest danger with expanding your business overseas is doing it too quickly and without the necessary tools, experience and research. Expanding too quickly can be a dangerous process if done in an uncontrolled way and it can result in the closure of the entire operation and put your local operations at risk. The best way to manage the growth process is strategically, with a medium to long term view. The expansion process can take up to a year to research, so ensuring that you have the correct skills set within the organisation is critical.
No matter what the industry, there are some basic guidelines (Certainly Not Exhaustive) that every company planning on international expansion should follow:
Plan Plan Plan (and plan some more)
It cannot be stressed enough that planning the expansion correctly is the start of any expansion process. By planning properly, companies are able to avoid some of the most common pitfalls when undertaking an expansion programme.
Ask Industry Experts
Why reinvent the wheel? Surprisingly, many successful business people are more than happy to share their experiences (good and bad). They will not give you a step by step guide on what to do, but they can advise you on what to look out for and what successful methods they used to ensure their expansion success. So before you take the leap, do some homework and discuss the topic with individuals that have already paid their school fees. There are other experts out there who have had extensive dealings in foreign lands and should be listened to. Professor Nick Binedell from the GIBS institute is a good example. He has been involved with many African countries and is extremely knowledgeable about business into the African continent and beyond. Many of these Intellectuals have written books and articles that are very relevant and a cheap source of critical advice. Don’t forget that many International Audit and Advisory firms operate in the countries that you may be looking at expanding into. Ask your Auditor or approach one that can put you in touch with their counterpart in the foreign country. While this type of advice may seem expensive, it is a lot cheaper than making a critical error in judgement made on the back of false information and assumptions.
Approach the international Trade and Industry departments
Most countries that have embassies located in South Africa, will have a locally based trade and industry department. Their purpose is to extend and promote business relationships between local businesses and their country. They have a wealth of information freely available for companies wanting to expand their businesses into their country. They generate market information, economic insights, trade policies and population statistics as well as the earmarking of certain industries where the country is lacking, whether it be products or services. The South African Department of Trade and Industry know the importance of export trade to South Africa and should be approached for advice and information. This information is typically freely available through the DTI and we would strongly advise that you discuss your plans with them before embarking on the journey.
Target management executives with International experience
Finding experienced business executives such as Financial Directors and Financial Managers that have had international experience within the market to which you would like to expand, is crucial to any expansion program. Through their experience and knowledge they can advise you on the steps needed to ensure the success and viability of your expansion program. This experience will be of huge importance when you are looking for fresh methods to expand business overseas. They have an understanding of what works and can help you avoid costly mistakes and pit-falls along the way. These executives may not necessarily need to be full time employees. There are companies such as The Finance Team that outsource experienced CFOs, FD’s and FMs that have International or African (specifically SADEC) experience on a part time, project or interim basis. These part time or interim executives can be engaged when looking to expand your operations internationally. A part time or interim FD or CFO does not want a full time placement. They have made a career of outsourcing their services and play an important role during an expansion programme and are able to assist by:
• Providing valuable country specific insights.
• Understanding operational necessities with the chosen market.
• Understanding compliance requirements.
• Devising operational planning .
• Implementing staffing requirements.
• Developing a Project Management Schedule.
• Developing an accurate budget and forecast for the expansion.
• Implementing best local business practices.
• Understanding local tax regulations and relevant compliance.
Once you have taken the steps above (and potentially others), you can then progress your international business expansion. Remember slow and steady wins the race.