4 Pitfalls of Taking Your Business Abroad

December 15, 2014


The U.S. is a highly competitive market–when companies of any size get to a point where they find it harder to increase their market shares, the natural tendency is to begin looking at other English-speaking markets. With the misconception that these markets are easily transferrable, many companies find themselves trapped in several pitfalls because they didn’t do the necessary research. Below are five barriers many companies face when attempting to create an international presence, accompanied by solutions for the problem.

Barrier: Fiscal and Regulatory. Treating the European Union like a United States of Europe because the currency is more tightly and fiscally integrated, causes one to overlook the serious sentiment each country feels toward its sovereignty and independence. While the Euro has erased some of the fiscal barriers, it is best to consider each country as its own entity. Additionally, employment laws are complex and not consistent from country to country. In some cases, like in Europe, the labor laws are more on the workers side than the employers.

Solution: Unfortunately, companies don’t always do their due-diligence to understand local tastes and local preferences. Instead of throwing a product over the border and hoping it sticks, hire an outsourced consultant or local expert who can advise on how to make your product more suitable for local markets. The U.S. Government Export Portal provides online trade resources and one-on-one assistance from counselors to help you design a training program to match your specific needs.

Barrier: Culture. Cultural differences are one of the biggest barriers companies face when conducting business abroad. For example, while living in Spain I received a meeting agenda that indicated it would start at 8 a.m., but found people still strolling in well after 9 a.m. While this would be frowned upon in the U.S., no one was offended or concerned by the tardiness. I’ve learned to never schedule a meeting before 9 a.m. or lunch less than an hour and a half–or before 1 p.m. The reality is, there’s not a 9-to-5 schedule abroad.

Solution: The social aspect of business is important. Understand social interaction, business practices and cultural norms, and don’t assume your business knowhow will be applicable abroad. Businesses fail because they don’t adapt to local customs. For example, European timing is more polychromatic while the US is monochromatic. So make sure to adjust to the fluidity of meetings, timing and meals if you want to appeal to natives.

Barrier: Language. Negotiations last longer, and often times, no one will do business with you until they trust your brand and service. People don’t run out for half-hour lunch meetings, instead these affairs last a few hours with wine and several courses. Consider your marketing materials. If you use the same brochure in America as you do in the UK, you may have alienated your prospects across the pond. Phrasing, spelling and overall jargon is different from place-to-place and region-to-region.

Solution. Invest the necessary time and effort to understand the local market and make your marketing materials appealing. Do some test marketing, see what kind of feedback you get from prospects in other countries and decide if it’s the right market. Internet marketing (via Google PPC) is a vehicle that can make testing easy–use the “testing” phase as an opportunity to talk to customers and partners before you jump in.

Barrier: People don’t consider time zones. How are you going to give customers a reasonable level of support if you aren’t adhering to their time zone? Will you do 24-hours? Are you going to provide it from the states? Ensure customers will trust you by providing the same services you would at your local headquarters.

Solution: Start with similar countries in similar time zones, or hire one local employee. Also consider finding a partner who can help you adapt your offerings. Don’t be hesitant because you don’t want to share in the profits–a local partner can be your golden ticket.

Take these barriers into consideration before jumping the gun. While the prospect of new market shares can be enticing, you’re doing your company a disservice by not taking the necessary steps.

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