Use up your UK options before looking abroad
I have created a product that is selling largely into the UK IT market but I would like to move into new markets, potentially India. Do you have any advice? - Chandu
As the UK economy rebuilds, developing markets such as India and China have had continued growth. You have capitalised in the UK market and now you want to move into new territories. But before you do, ask yourself: have you exhausted the opportunities in the UK, a market you clearly know? What percentage of the domestic market do you have? There are always opportunities to be had, you just have to be more creative in your thinking to find them.
Before you invest time and money you have to remember moving into an emerging market such as India will present challenges. Barriers to entry include language, legal, raising capital, intellectual property, and cultural interpretation. Not to mention marketing and advertising. Do you know the market place well, do you have experience of the culture? Look closely at your domestic operation and establish whether a move abroad is right for your company. Of course, there are risks but there are also obvious benefits. All things considered, you need to make this decision at the right time and for the right reasons. Importantly, you need to choose the right foreign market or markets to expand into.
If you are serious about expanding, take a trip to your desired location and scope out the opportunities and identify any problems. Starting small will allow you to build quality relationships and learn as you go. Be vigilant to the challenges, carry out extensive research to ensure you know the language, culture and religions as this plays a huge role in any business transaction. Remember your deals with new business in a new market will be different and it’s important to learn the characteristics of your target customer/client.
When setting up a business many years ago, I remember we were very conscious that we were dealing with a global customer base. Most of the businesses we were dealing with were large, multinational companies. We needed to demonstrate that we had a global footprint and a global presence. One of the key questions multinational clients always want to know is, “Do you have relationships or affiliations within the counties where we have operations?”
We approached one of the largest international service office companies and said that we wanted virtual offices in a set of 14 countries. It was quite amazing; for $100 a month they gave us virtual offices in America, Japan, China, India, the Middle East, and so on.
If you sell a product or a service in a foreign country, you must comply with local regulations. There are a number of organisations that will help you understand the regulations of each foreign market. The web offers great access to information and there are a number of government websites, government organizations and chambers of commerce that will help you understand the regulatory challenges of international markets.
If you are entering a new market, you must appreciate that each foreign country has its own cultural differences in terms of a product, the way the services are delivered and the way the product is designed. In certain countries, different colours have different meanings. In some countries a colour that may be very acceptable here may be perceived quite negatively there. Therefore, you need to make sure you fully understand the compatibility of the product and service into a new market. This is absolutely crucial.
Many businesses that have experienced the impact of international trade have seen a positive improvement on their bottom line so it can be a successful route and one for you to explore.
Meet James Caan
He may have come to fame in the Dragons’ Den, but James Caan has been a businessman for more than three decades — and knows all about the challenges business owners face.
At the next Business Connections event on November 27, the entrepreneur will share insight from his own experience over the last 30 years, offer top tips on building up a company, and reveal how to get to the top — and stay there. The event runs from 7.30pm to 9.30pm at the Emmanuel Centre, Westminster. Doors open at 6.30pm. Tickets are free for Business Connections members, annual membership costs £50. Or they cost £50 for non-members.