There are 227 days left on the countdown until Brexit (as I presently write) and the current media is reporting a standstill in negotiations with the European Union on a trade deal. Its reported by the Guardian that over 100 seats in parliament that supported Brexit would like to remain in the EU.
Time is ticking.
Yet on the other hand, certain business polls demonstrate a clear optimism for a bright new dawn for British trade, as it forges its own path and independently negotiates terms inside and outside the realms of the EU.
Whichever way you wish to see the impending Brexit date, what we must accept is its inevitability. With this acceptance comes a responsibility to act, proactively.
Seeking new markets is an area which AXESA has extensive experience with and we aim to apply this in every aspect of the delivery of our Investment services, especially for our Private Investor clients.
The key questions that need to be addressed when ‘Going Global’ are
1. Knowledge is Power. So What do You Know?
Immersing yourself in your client/customer’s shoes is paramount to a successful international venture. Demographics are important. Our experience found (surprisingly) that many aspiring international corporates had not even identified the basic demographics of their actual client base.
Yet, at the core of success is learning more about what makes your clients tick, what is their motivation to engage you as a service provider? What attributes do they seek in you? Why do they purchase X good from you and not your competitor?
2. Location, Location, Location. Where are you Going?
Having an in-depth knowledge of your existing client base acts as the foundation for you to seek similarities in new markets abroad. Taking into consideration that each market has its own particularities; business climate, socio-cultural facets and economics, having the capacity to spot a potential new client base in a new jurisdiction is only feasible if you are well acquainted with your existing customer.
It is critical to look into a new market, applying both quantitative skills (researching local consumer purchasing reports, national statistics on employment, economy, purchasing power) and qualitative skills. This involves delving deeper into the social fabric of the market you are exploring, identifying gender pay discrepancies, crime rates, religious freedom, freedom of press and multi-culturalism amongst many other facets.
The key element is entering a new market with a flexible structure. One where your company can adapt their service offering or product offering as well as procedures to deliver to a new and lucrative client base.
If you expect to roll out your stringent but effective business model in each new market you explore (Copy-Paste style) – you will soon confront limitations, bottlenecks and higher costs.
Flexibility and adaptability are two characteristics that need to be transferred and reflected throughout your business operations as you expand internationally.
3. Connections. How do you foster Trust in others?
At first, reading about communicating across cultures came across as an ‘MBA School Theory’, the type you read at night and forget in the morning. Yet time and time again it became evident that communication is truly at the core of all interactions in the business world.
Tone, in oral as well as written communication is sensed intrinsically. Behaviours and mannerisms, timeliness and volume all give off indicators to the recipient on the type of individual they are engaging in business with.
Trust is paramount to success, whether your aim is to bring on board a new client, a local supplier or a potential JV partner trust is at the heart of success.
We have a strong network of local translators in more far afield jurisdictions where we operate. We have learnt that by having a local translator who is experienced in commercial matters they can convey more than just a message but also relay motivations and purpose to a prospective foreign associate.
Investing some time to study the business environment and cultural queues that are acceptable and intolerable in a new market can save you from potentially disastrous and expensive business ventures in foreign markets.
Our team have worked with varying cultures from the Far East, Europe, the Middle East and South America. We aim to act both as a business but also as a cultural bridge for our clients in all their international transactions.
4. The (Ugly) Truth. So Can you ‘Just Do It’ ?
We live in an era of empowerment, a welcome change and one that has given birth to an age of entrepreneurs and freelancers, social media celebrities and women’s rights advocates.
It is certainly a great moment to be alive in, yet in parallel with empowerment we need to be accountable to ourselves and our businesses.
To do so, we need to take a thorough, intimate and scrutinizing look at our capabilities, financial resources, cashflow, business models and teams and ask ourselves – can we expand abroad?
Capability assessments are something we undertake in partnership and close collaboration with our clients. We feel its fair for companies to look into their existing technological resources, business processes and finances and address whether they are ready to take the plunge and risk resources, time and money in a foreign venture.
Our commitment is to be as thorough, honest and supportive as possible to ensure our clients take the right step forward.
Key points to consider when assessing your ‘readiness’ to expand into international markets is whether your service is transferable, demanded and deliverable in a new market. Similarly it applies to goods which need to be transferable, demanded and deliverable (supply chain assessments).
In our experience, if the motivation is to grow for pure profitable interests the results are never as lucrative. Our aim is to ensure our clients have taken sufficient time to do some internal research and if their ambition is to deliver quality goods/services in new fruitful markets then this commitment needs to be transmitted to their team, partners and suppliers to ensure it bears results.
5. To Partner Up or not to Partner Up? That is the Question.
Whether you aim to expand globally by setting up your own virtual office or brick-and-mortar company in a new market, identify a local associate or distributor or simply export, the shape and form of entry is critical.
We facilitate company start-up operations in new markets where we have come to an agreement with the client that this is in fact the best solution. Points to be considered in this are whether the company has the financial resources to set-up a local presence, the tax and economic implications (corporate tax, withholding, capital controls, stability of the local currency, arms length principles), local competition and legal framework (trademark protections) and safeguards for foreign investors.
We have a network of local advisors we work with that support us in assessing new markets and potential ‘start-up’ or greenfield projects.
Alternatively, we commonly advise our clients to work in collaboration with us in the sourcing, assessing, on-boarding and implementation of a new affiliate or associate who will act as a local representative.
The key criteria they should meet is to be financially solvent, have a local market share, be well aware of local regulatory and industry practices, be aptly registered and licensed and more importantly have the internal resources and motivation to offer results through co-marketing and collaborative work.
Repeatedly we have seen local-global partnerships fail, a major international group (or aspiring one) finds there is no traction after both parties sign the dotted line.
Yet failure is merely an outcome of the underlying cause, which is poor research and selection.
Partnering up with a local company that is not well aligned to your corporate values, work ethos or has the necessary time and resources to make this work with your support will never result in a successful venture. Both parties need to be accountable for making a partnership work – as we all know – it does take two to tango.
What have been your experiences with expanding in new markets? What would you advise as the key questions to address when exploring international markets?
Author: Lorena Jimenez (Director: Business Development @ Axesa Global)
An advocate for international business, global mobility, entrepreneurship and egalitarianism in all realms of business and private life, Lorena is passionate about enabling individuals and corporates to expand their global footprint. She completed her Business degree at a leading Australian University before undertaking a Masters in International Relations in the United Kingdom. Whilst working in the financial services industry she also undertook a Postgraduate Degree in Law (Corporate) from the University of London that complemented her extensive commercial expertise. Lorena has worked throughout Europe in various industries including renewable energy and insurance. She has experience in international business development having on-boarded major international firms, led group expansion initiatives and collaborated with businesses globally.