Insight: There’s a world of opportunities

But think long-term, ensure staying power

Expanding a business internationally does not need to be a double-edged sword. While such a move can give rise to challenges, it can also dramatically increase opportunities.

Business issues are multiplied when setting up overseas, says Frank Pho, vicepresident of global expansion for the Business Development Bank of Canada. He recommends “revisiting the whole business model” before moving into a foreign market.

“Going into a new country is a huge investment. Entrepreneurs have to think longterm and ensure they have staying power,” he says. “Take stock of what you have before you add more people. Do it in a disciplined, methodical manner so the new resources complement your existing team in Canada or elsewhere.”

Entrepreneurs must also familiarize themselves with the new market’s culture, regulations, business practices and supply chains.

“You have to understand the foreign system or risk being blindsided if you just apply the Canadian model,” Mr. Pho cautions. “Make sure you are aware of the differences in customs and purchasing behaviour, as they will impact your ability to sell your products.”

This knowledge will also allow entrepreneurs to craft a clear and convincing message that addresses client needs and demonstrates the likely return on investment, which will help in the negotiation of an eventual contract with a local supplier.

“Adopting the perspective of in-country clients will enable you to determine how much localization is required to have a product that addresses their needs in terms of manpower and cost,” Mr. Pho says. “And that will indicate the kind of skill set you need to adapt the Canadian product for the in-country behaviour and market.”

In addition to assessing the capacity of the current team to service the target market, companies should ensure that there is alignment and commitment from their current stakeholders.

“When tapping into a new foreign market, entrepreneurs have to add in-country resources,” Mr. Pho says. “They should also consider hiring additional staff domestically to manage, monitor and cooperate with the in-country team.”

Remember to build in some financial reserve as most ventures do not succeed on the first attempt. “Staying power is a critical success factor as it provides an opportunity to learn from your first endeavour and improve your incountry business model,” Mr. Pho concludes.

“Successful ventures integrate their foreign operations in a manner that creates true synergy with the home team to accelerate their global expansion.”