By Richard Green, CEO and Founder, Evvnt
When it comes to business objectives, a key goal at the forefront of any entrepreneur’s mind is maintaining consistent growth. This requires being on the lookout for scale-up opportunities.
Naturally, once a business establishes itself as a reputable brand in its own local market, ambitious entrepreneurs and CEOs commonly find themselves looking overseas for exciting new routes for expansion. This has become particularly relevant here in the UK, with the onset of Brexit compelling some scaling small businesses to look beyond Europe for the next step in their commercial growth, like the United States.
According to a recent survey by Santander, 69% of SME leaders are planning to expand their international activity over the coming 12 months – the highest figure ever recorded by Santander since first beginning its Trade Barometer series. What’s more, of those companies that plan to start trading internationally for the first time, 75% are anticipating growth.
The research reveals that business leaders in the UK have clearly not been dissuaded by the uncertainty surrounding Brexit and are actively looking to grow internationally. However, it is important for companies not to be hasty. Despite the allure of foreign markets, there are unique challenges for businesses looking to expand internationally. Moreover, there is inherently more risk involved when setting up an international presence, and for any company to make international expansion a success, strict attention to detail and forward planning is essential. In short, a strategy is needed which takes into account perceived challenges while also demonstrating the flexibility to adapt and take advantage of opportunities as they arise.
At Evvnt, we recently expanded our event marketing technology into the US. Having now established a presence across the pond, there are some important considerations that hindsight has taught us; so here a few things that ought not to be overlooked by entrepreneurs considering moving into markets outside the UK.
Planning an international expansion
From the outset, entrepreneurs must identify exactly how an international expansion will help with their long-term scalability. Has your business already established an effective market presence in your home country? And how will resources be allocated to support a move overseas? Scalability is all about consistency, which is why entrepreneurs should not see rapid international growth as an objective. Planning for gradual and sustainable growth overseas means businesses will be in a position to take small steps in the right direction, as opposed to a giant leap which is difficult to manage.
Of course, some businesses are better placed than others to consider an international expansion. For example, tech businesses are well-positioned to establish a presence in foreign markets due to the nature of the product or service that they offer, which is non-tangible. In other words, there are fewer concerns around operational costs or logistics. This process can be more complicated for SMEs seeking to export a physical product.
Understand the market
It is crucial for entrepreneurs to understand the market they are planning on entering. While you might think there is a need for your product or service, such an assumption needs to be backed by comprehensive research into the existing competition, key market trends and the size of the potential customer base.
Some markets may require an entirely different marketing strategy or product/service delivery method, while others might have strict government regulations limiting certain advertising and marketing activities. In this regard, every tech business – which as I mentioned above might be able to scale more cost-effectively – must be diligent in preparing for potential cultural, linguistic and legislative issues.
Entering a new market without the proper research and strategy, companies can easily find that they lack the expertise necessary to tackle challenges. For example, not possessing the knowledge of a foreign country’s legislation can result in significant penalties, but these can be avoided should the right research be undertaken. This is particularly true when it comes to technical regulations concerning a foreign tax framework – the research underpinning an expansion strategy can address these issues and ensures the business is a position of strength right from the beginning.
To acquire this information, it is important to seek local advice from people and other businesses who understand and operate within the same sectors. Not only can they provide valuable information that is not readily accessible, they can also offer insight on local business cultures and practices, particularly if there are culture-specific behaviours that you need to be aware of.
Look to partnerships
Forging strategic partnerships with international businesses established in your target market is a fantastic way of introducing your service or product to a foreign audience. Partnerships allow companies to pool resources and knowledge and can also provide them access to an established customer network.
As part of our expansion into the US, Evvnt recently signed a deal with GateHouse Media – a US-based media company that publishes more than 140 daily newspapers, over 680 community publications, and almost 570 local-market websites in 38 states. Through this agreement, Evvnt now has access to over 500 US newspapers across some of the country’s major cities (and these publishers have access to Evvnt’s marketing software and online event calendars). We’re already seeing immediate results as a consequence of this partnership, and we are actively seeking new partnerships of a similar nature.
At a time when UK businesses are preparing for the potential fallout from Brexit, Evvnt’s deal reflects the international opportunities on offer. The country’s tech community is thriving, and there is a clear interest from overseas firms to partner with disruptive companies offering an innovative B2B or B2C product or service. Partnerships are therefore extremely beneficial for tech SMEs seeking to expand abroad.
The UK tech scene may be renowned for its ability to disrupt and innovate, however, the ongoing ambiguity surrounding Brexit has made it difficult for some tech companies to plan for the future. Nonetheless, there are some fantastic chances for entrepreneurs looking to take advantage of overseas opportunities. The key to a successful expansion abroad is not to be hasty. Instead, companies need to understand how such a move will impact their future scale-up, undertake the necessary research and look to form partnerships that can smooth an SMEs’ transition into a new region.