With the economy consolidating a steady recovery, companies in the UK are feeling increasingly positive about their prospects, with many entertaining the idea of international expansion in the not-too-distant future.
However, making the move abroad is certainly no mean feat, with competition for business arguably fiercer now than it ever has been before.
Despite the tough commercial climate, there can be little doubt that UK firms are feeling far more optimistic than they were a few short years ago, mired in the depths of the financial crash and ensuing recession.
This has been highlighted by the latest ICAEW/Grant Thornton UK Business Confidence Monitor (BCM), which showed that the index has hit a record high, standing at +37.2 in the first quarter of 2014. This is a notable increase on the +31.7 figure for the final three months of the previous year.
Not only that, but it would also seem the UK is an especially exciting place for businesses to be operating. At the end of 2013, the very same index reported it believed the region would be the fastest growing western economy going into 2014.
In April 2013, BDO reported how its international survey of chief financial officers from mid-sized UK companies found that 82% felt optimistic about overseas expansion, while 78% anticipated more revenue from investment abroad over the coming three years.
And yet, a global Economist Intelligence Unit report conducted in February and March 2012 found the trend was not unique to the UK. Almost nine in ten participants said they felt their number of overseas clients would increase over the next three years, while more than three-quarters (77%) believed, within the same time frame, they would be operating in more countries than they were at the time of the survey.
So, it would seem that one way in which companies are looking to invest and grow is by turning their attention to overseas markets. After all, according to the Trendsetter Barometer Business Outlook PwC 2013, participating private companies that sold products and services abroad tended to forecast higher revenue growth than those which only operated on a domestic scale.
However, it’s one thing deciding to expand overseas, but it’s a whole other ball game to work out where exactly you want to go. The only way to do this is by carrying out research, which forms the foundation of any solid localisation strategy, without which you might as well pack your suitcase and get on the first flight home.
To do this, you cannot leave any stone unturned when it comes to finding out everything there is to know about the market you are considering, be that a country or wider geographical region.
Who will be buying your product or services? What challenges are posed by the current market? How will you fare against competitors? What is your unique selling point (USP)? You may even need to consider factors that do not apply to the markets in which you currently operate.
Of course, your research will need to extend beyond demographic findings, into factors such as legislation and fiscal responsibilities, which is where you will need to ensure you have the right expertise supporting your move abroad. You simply cannot afford to get these things wrong, otherwise not only may your business fail, but you could also end up landing you and your company on the wrong side of the law.
As if the task wasn’t already cumbersome enough, with domestic economies so heavily influenced by what is going on around the world, it will be important that you consider external factors outside of the confines of your new market that could have an influence on your operations. No man or business is an island.
An ongoing process
It is worth bearing in mind that the job is far from done even once you have installed yourself in your new patch. Ken Esch, partner in PwC’s private company services practice, explains how it is not uncommon to see a company’s sales office in a foreign market become more of a research and development centre, as the firm looks to finetune its operations in that particular area – a concept known as ‘glocalisation’.
The most important thing to remember is that the task of understanding your market is far from a one-off job that you can tick off a to-do list. For all intents and purposes, it is a never-ending operation because the very nature of a market is that it fluctuates and changes over time – and you need to keep pace with it.
Don’t just hire a freelancer for a few months to oversee the move. Consolidate a team that is going to safeguard your company’s international expansion long into the future and ensure you remain at the forefront of your commercial pack by continually refreshing and updating your knowledge.
When it comes to putting your team together, it may seem obvious, but just because you don’t have an army of bilingual experts at your disposal does not mean international markets are not an option. As more and more businesses recognise the goldmine that could be waiting for them abroad, translation and interpretation services have been bridging the language barrier and plugging the potential skills gap.