They say it’s a small world and in many respects that’s true. Modern technology and the tide of globalisation has made it easy to trade internationally and work from anywhere in the world, but businesses that underestimate the challenges of entering new global markets do so at their peril.
In the past 18 months we have gone from a business providing strategic advice and business services to construction companies in the UK, to an international company with local subsidiaries on two continents booking over £2.5m in sales. In this post I share what we learned on our journey and reveal our top tips for expanding abroad.
Rule 1: Master your domestic market
Before embarking on your international expansion, we recommend that you have a solid footing in your domestic market. For us that was the UK, but for many IIBN members it will be Ireland and the United States. In our case. having gained 25% market share for construction R&D claims and after cementing our position as the go-to consultancy for strategic advice in the sector we decided to seek pastures new. And with that, our international expansion began in earnest.
Rule 2: Find your niche
We knew that in order to replicate our rapid domestic growth overseas, we would need to pick our battles wisely. We recognised that as an unknown quantity in Canada, selling our strategy services would be a tall order but we also knew that the Canadian tax code was almost identical to the UK. Armed with this knowledge we focussed our efforts on R&D tax credit claims, taking our UK experience – where we helped increase construction’s share of claims from 1.6 to 2.5% – to Canada.
Meanwhile closer to home in Ireland, we knew that we had a network of existing customers that straddled the Irish channel and relationships through organisations such as IIBN. With this in mind, we determined that there was enough demand and brand recognition to market our full portfolio of services in the country.
Rule 3: Do your research
While success in one market certainly predicts the likelihood for a business model to work overseas, it is by no means a guarantee of success. Thorough research of the local market, economic conditions, incumbents and the regulatory environment is essential to validate initial assumptions. We did this through a combination of desk research and by reaching out to connections we had in those local markets. This gave us critical insights into the business climate and the nuances of doing business locally.
Rule 4: Start with a clear strategy
Once you are confident in the viability of a potential market, it is critical to plan every detail of the market entry strategy. Doing so can save a lot of difficulties down the line and ensures that you adopt the appropriate objectives, tactics and legal structure to suit your business. A detailed SWOT analysis of the market will identify which areas should be targeted and reveal any gaps in your expertise.
Rule 5: Leverage your address book
If you plan on expanding overseas, it’s much easier with a trusted partner who knows the country. Without people with the necessary cultural expertise and local contacts, you’ll be at a competitive disadvantage relative to your domestic rivals, so organisations like IIBN are invaluable. Try to find an industry insider who can vouch for you and make introductions to potential customers and employees. Your local legal counsel or accountant can also be a vital source of information and a great contact to lean on for advice.
To meet potential customers, we recommend that you leverage business networks and attend as many events as you can. The fact that our first lead and sale in the Irish market came via IIBN is testament to the effectiveness of these organisations.
Resist the temptation to run before you can walk and remember that the grass isn’t always greener on the other side. Find your unique advantage and establish how it plays in your prospective international markets. Plan rigorously and know that relationships will determine your success. By following these simple rules, we have built a successful international business and we know that IIBN members have the resilience, expertise and creativity to do the same.
Brendan Morahan is director and co-founder of Invennt, the leading specialist business consultancy for construction. If you would like to discuss your own business’s global ambitions, please message him through the IIBN website or phone him on +44(0)7816 514505.