Going International

If you are a US company, you are fortunate to be operating in the most viable homogeneous combined marketplace in the world. So, why might you want to risk the potential pitfalls of going international? It’s not for everyone, but there are a number of excellent benefits, especially for companies in the right industries. Obviously, the first benefit is the advantage of increased market size.

By going international, you open your products and services to a much broader marketplace including many prospective customers and/or clients who may not be able to obtain them otherwise. And in the current financial market, while the US Dollar is weak relative to most foreign currencies, your products and services may be a bargain relative to prospective competition. But there is another, often overlooked benefit to this move. If you want to grow your business and become a serious contender within your industry, a viable international business is a necessity. The ability to be successful in the international marketplace represents a hurtle, an accomplishment that sets you apart from others with less ability. And, if you are seeking funding or financing for expansion, it is an imperative.

Getting Started

There are many ways to grow internationally, and most companies choose to do this through the path of least resistance – finding international resellers and managing them from the main office. While this is an OK way to start, even here one must take care to assure that the process is properly managed. The vetting of international partners is not always as simple as the process back home. Great care must be taken to assure that your prospective partner is fully covering the territory you need. Some smaller international resellers attempt to cover too much ground; for example a reseller in Germany may also attempt to cover Switzerland and Austria. But the cultural and market differences that exist in Europe are vastly different from those experienced at home. Many seemingly small countries are widely divided culturally, often in a way that would be difficult for an American to understand. A partner in the Netherlands once told us that there are 10 distinct regions within the country, and often folks in one region mistrust those from others to the point that they don’t really want to do business with them. And this in a country of only 10 million people!

Multiply this by every country in which you wish to do business, and it’s enough to make you want to give up before you start. But these facts are not meant to discourage you. Indeed, the reasons for expanding internationally are still just as valid; the potential pitfalls merely serve to illustrate the need to seek guidance at an early stage from someone familiar with these issues and how they can affect your plans who can assist you in the process. And there is a process – we recommend a carefully planned process, where each step is laid out and appropriate milestones can be met.

The process

Every project worth doing must start with a plan. The plan we recommend is one that will allow you to control your expenses and measure your results throughout. But, there is a cost involved, and you need to plan on a longer payback period to get business flowing internationally than you may be used to. In our experience with the larger ticket enterprise software marketplace, it takes at least 6 months to establish a viable channel, and another 6 months to establish a reliable revenue stream. That number can vary based on the market recognition of the product, pricing and other factors, but in general some patience is required.

The first step is to get some help. If you are like most companies at this stage in their development, you already have a stressed-out VP of Sales who may be trying to also handle marketing and possibly even product development! The last thing you need is the false economy of piling yet another task on this person (who of course wouldn’t be in that position if he or she were not willing to take it on!) and give him yet another opportunity to fail. Do yourself a favor – find someone experienced in international business and either hire them or use them as an outside resource.

Once your international manager or business development consultant is on the case, he will help you with the rest of the plan. Broadly, the steps are:

• Choose your primary target market
• Choose a secondary target market
• Take a trip to meet prospective partners
• Select the best partner(s) for the market(s) you want to mine first
• Review your back office procedures, and assure you are ready to handle international orders.
• Establish a support process
• As a part of the process, train your partner(s)
• Make another trip to do joint sales calls
• Begin a localization process
• Define an appropriate PR campaign
• Market, market, market & support, support, support!
• Collect your rewards

There are obviously lots of small details within each of these broad categories, but following the plan will position you for success in the international market!