If you’re an entrepreneur looking to grow your business internationally, expanding into multiple countries can exponentially impact your bottom line business and brand, allowing you to grow efficiently. Scaling your business beyond borders, however, is a path riddled with bumps and obstacles.
In my previous role leading a food diagnostics company for more than 20 years, I guided its growth from one country to doing business in over a hundred. Our firm became a worldwide player and influencer in food safety diagnostics, and in a matter of years, 65% of our business was outside the U.S. We also achieved 38% market share globally.
We succeeded because we secured data through market research and used the data to inform our global strategy.
Here are a few key strategies to achieving this kind of international growth.
Research your market
The first step is to check relevant market research. You may need to hire a research firm to accurately gauge the geographic market for your industry and product. Be sure to tap into research that drills down into the intricacies of your vertical market and separates out the various geographic markets. I recommend research companies such as Frost & Sullivan, Nielsen, Statista and Gartner.
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Research firms can detail the exact market size of specific geographic areas, competitors, market dynamics, expected growth rates and expected revenue — usually over 10 years. This data is critical when planning for an international rollout.
Market research reports are easily accessible online either as abstracts or the full report for a fee. If you want a custom report, research firms typically take 90-120 days or more to deliver a comprehensive report.
If you operate in a niche, this information is worth its weight in gold, and I recommend hiring a professional to secure the information you need. A customized market research report costs generally from $20,000 to $50,000, depending on the industry and market research organization.
As an example, the company I ran engaged a market researcher to determine which international market we should prioritize, and the present and future product demand for our current and future product pipeline. We also readjusted our product pipeline based on the demand in key international markets.
Prioritize international rollout based on ROI
In order to achieve international growth, you need to plan based on ROI estimates.
Narrow down the markets for the first phase of global growth by determining which is most viable and sizable for what you offer. Assess how easy or difficult it will be to enter a particular market, and whether its size justifies the effort it will take to establish a solid footprint.
All countries have regulations for contaminants in food. Regulations we uncovered through market research and a subsequent ROI analysis helped us choose which international markets to pursue first.
For our product, we estimated ROI based on a 10-year revenue projection. For example: For Italy, we estimated $7.5 million in sales over 10 years and invested $350,000. We met these sales numbers, which led to 2,000% ROI and a 36% annualized return each year.
While your local market may seem the most obvious to pursue initially, sometimes it’s not the best choice. I’m currently advising an EV battery accessory company based in the U.S. whose first target market is Sweden, as it has made big investments in EV technology.
Tailor marketing and terms to the market
Hire staff with cultural intelligence and fluency in many languages. Our team was fluent in 15 languages due to our multiethnic and multiracial male and female staff who reflected key markets we were planning to enter. Companies that intentionally diversify at launch stay that way. Our company looked like the United Nations, with representation from every continent.
Be culturally sensitive and smart in your marketing. As with all content, social media and websites, ensure what you present online works in all corners of the globe. This applies to the technical aspects of your website, user experience, content and messaging. Arm your global partners with a choice of marketing deliverables to help them tailor your company’s message to their particular market.
Don’t assume a strategy that works in one country will be effective in another. You need to understand each country’s vernacular and ways of presenting content. For example, my company liberally used social media to promote our product to the Americas. In Asia, we mostly stayed away from some social media outlets because they aren’t used as much in B2B marketing.
Ensure your payment and billing systems work equally well in your domestic and international markets. You have many billing and payment tool options, so be sure to audit the ones most suitable for your company and its global reach.
Expect to offer international payment terms at 60 or 90 days. On the other hand, extend credit gradually: While you’re building mutual trust, make sure your distribution partners follow through on smaller payments and agreed-to terms before offering larger lines of credit.
I can’t emphasize enough how critical trust is when you scale globally. For instance, we worked closely with our partner in India who had a large spice customer and collaborated with them to secure the business, which required a competitive bid.
The partner presented us with numerous regulatory testing protocols and documents that needed to be handled within a certain time frame for the annual bid. Each year, we prioritized getting documentation to the partner so they could complete the bid and secure the business. They trusted that we were thorough, transparent and could be relied on to get the data to them on time. We always delivered on the promise.
Engage key opinion leaders (KOLs) in your space who will vet your product and may publish papers on its performance. In our case, we collaborated with key opinion leaders in the scientific community and internationally recognized science leaders from government or quasi-government agencies in food safety diagnostics around the world.
In many countries, bribery is a way of doing business. Under no circumstances should you or your distributors engage in such malpractice to obtain business or for any other purpose. It is illegal for any United States company to engage in bribery, whether for themselves or their distribution partners. When vetting distribution partners, make sure they do not conduct business using any form of bribery.
Monitor performance and set contractual goals
Set performance goals in writing and in contracts no matter how many referrals you get. Establish performance revenue goals for years one through five. In most instances, the first year’s goal is modest; the second year is usually at least twice the first year, and it increases from there.
For example, my company’s contract goal for an Italian distributor was $100,000 in year one, $250,000 in year two, $500,000 year three, $750,000 in year four and $1 million in year five.
In the much smaller Taiwan market, our product goals were about a third of the Italian distributor’s goals. Each distributor met their numbers in years one and two and exceeded their numbers in the following years. The Italian distributor attained a 70% market share of our product in Italy, while the Taiwan distributor had a 50% market share. We were impressed and happy with the results.
Success is measured by dollar goals met versus the contract amount; number and quality of customers (this metric is usually not in the contract); and the quality of representation, including marketing of the product and brand recognition. Monitor performance on a regular basis — at least once a month. Even though you want each contract to be successful, be sure to build in your ability to exit according to the contract terms if a distributor’s performance is below expectations.
International growth can make a huge impact on your business’ bottom line. Working with people around the world can be an enriching experience. As you scale your startup into new countries, keep data and ROI top of mind to ensure your expansion is successful. Support your expansion efforts with hard facts and numbers, and your business will grow and thrive.