Entrepreneurship

12 mistakes to avoid while expanding your business internationally

 

While successfully developing an international business, I’ve identified a set of mistakes that are a receipt for failure.

Expect an overnight success. I’ve seen many companies fail in international business after an enthusiastic first move. When results don’t materialize immediately — they quit. They quit too soon. Adjust your expectations — it will take longer and it will be tougher than you expect.

Lack of 2Ps: patience and persistence. International clients’ mission in life is not to honour your business enthusiasm. Very frequently they will ignore you, disrespect you, forget you. Remember — it’s you that is trying to enter their lives, not the other way around. You have to be absolutely flexible and adapt to their rhythm and priorities.

Be proud. I know you’re respected and even maybe famous at home. Now understand this — in the international market, nobody knows you!

Be stingy. If you focus on costs control instead of income growth — why should others (i.e the client) focus on your income? Be generous and create an atmosphere that will drive the external market to be generous towards purchasing your products and services.

Delegate relationships building. To build high level relationships you have to do it yourself. You cannot delegate this task to junior staff. If you send your staff, the external market client will give you access to their staff. Decision making relationships are CEO to CEO.

Don’t build local partnerships with key influencers. You don’t know nobody there. Nobody knows you. You can’t do it alone.

Expect local partners to work for free or on a pure success fee model.No executive director / division manager in your company works without a fixed monthly salary. Why should it be different with very senior local partners?!? You pay peanuts — you get monkeys!

No resilience to endure the pain. I understand it’s difficult to stay away from family, you’ll miss them, they’ll miss you. I understand that long distance relationships are difficult and that you’ll be risking damaging what’s most precious to you — the relationship with your husband / wife and your kids. I understand the impact (the damage) on your morale of loneliness, of hotel rooms, of airports and of frequent long distance flights. I understand that while you’re away you wont be able to effectively control your business headquarters, you’ll disconnect from your top executive directors. Now, understand me, if you’re not willing to stay 150–200 days per year away from your family and from your company headquarters — don’t even start international business expansion. The place of a general in war is in the battle front line, driving the troops, not safely protected at home.

Too attached to formal / organised business procedures. You have to be ready to celebrate contracts you have no way to enforce. You have to be ready to have counterparts changing written agreements along the way. It’s their territory — it’s their rules.

Focus on immediate profitability instead of focusing on long term dominance of the international business space. No matter how big and old your company is on your home market — in the foreign market you are a startup. Don’t manage your international business like a cash-cow that you have to optimize to maximize profit. The main focus of a startup is income growth and playing field dominance.

Focus too much on the business plan, on the rationale strategy. Get this — the business plan is almost meaningless. You don’t know the target market. You can’t even anticipate many of the risks and challenges you’ll be facing. Success is about hustling. It’s about fast agile decision making. It’s about flexibility and adaptation. Like Darwin said “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change”.

Justify lack of results with product / price competitiveness. Even if you were selling genuine pristine $100 bills for $50 you would still struggle. Clients would still doubt you, they would think there’s something wrong with that offer, they would still hesitate to buy the $100 bill at half the price. It’s not about the product or the price — it’s about outworking your competition.

I’ve seen many companies fail in international business development due to a combination of these mistakes.

My goal with this post is to help you identify and avoid these pitfalls — making you more successful at expanding your business internationally.

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