How to build an international business expansion strategy

The growth of e-commerce and technology over the past decade has made growing overseas operations easier—and in many cases, essential to staying competitive. That's why it's important for many businesses to invest time and resources into building an international business expansion strategy.

As a business leader, you'll need to know what to consider when expanding your business internationally. You'll also need a firm grasp on signs that indicate whether now is even the right time for this project.

First things first: Is your business ready?

As with any business decision, there are many goals and factors to weigh—deciding whether a global expansion strategy makes sense is no exception. You may want to increase market share or revenue, get a hold of top industry talent or stay ahead of domestic economic conditions. Additionally, key indicators on business performance will help you determine if global growth makes sense right now.

1. Solid domestic performance: Strong profits and operational efficiency can boost the chances that your expansion efforts will succeed. Revenue doesn't need to be growing substantially—the key is for the company to be well-established and stable in its domestic market.
2. Rising demand or interest abroad: If you've observed demand for your products or services in other countries, expansion can be a practical choice. Or perhaps there's an observable consumer need that no competitors are currently filling.
3. Domestic sales are slowing: A slowdown in domestic sales could indicate the local market has hit saturation. Global expansion could help renew growth in this case. You might also want to secure your company's place internationally if competitors could easily replicate your products.

Form a foundation before you leap

Before you can reap the potential benefits of international expansion, it's important to have internal infrastructure and systems in place to run your operations smoothly, or issues resulting from a complex supply chain may be greatly magnified abroad. Therefore, you need to strengthen your internal operations first by ensuring your supply chain is running as efficiently as possible, so it can provide a model for your overseas operations.

In addition, it's a good idea to ensure that good communication protocols are in place. How does the information flow to identify and resolve issues, and who is responsible for what? Consider implementing virtual tools to foster collaboration across remote teams if they're not already in place. In addition, take the time to understand the local vernacular in the region where you're expanding—words can carry different shades of meaning in different cultures, and having a firm grasp on these differences will help you share information in the best way possible.

Finally, you'll need to ensure you have sufficient growth capital to fund international expansion. Ignoring these, and other foundational considerations, could create major pitfalls and challenges, ultimately impacting your business' bottom-line.

Build success through careful planning

Before you seriously pursue international expansion, you'll want to build relationships with prospective customers and local business owners. Onboard an agent or employee—or a partner with an individual or business—who has strong business relationships and a deep knowledge of the logistics industry in your target country.

It's also a good idea to create a detailed analysis for your expansion. Determine what the market potential is for your business and how much time, effort and capital is likely needed to achieve that objective, and outline these in your documentation. The analysis should also identify what resources you have and compare those to the resources you need.

Using the information and documentation output from these first steps, determine your strategy. You can build the new international business organically—in other words, from scratch—or partner with someone on the ground in the new location. Alternatively, you could acquire another company and re-brand that firm as yours.

With the pervasiveness of social media, you might choose to partner with influencers on your preferred social channels. These voices can help build trust in your brand throughout the region you're expanding into.

Finally, whatever route you take, remember to adhere to all the national, regional and local laws. Be mindful of the cultural differences, as well, so you ensure the process flows as smoothly as possible.

An international business expansion strategy can be a profitable path for growth, but the process has a number of moving parts. By remaining flexible yet focused, understanding the potential risk of international expansion and finding one or more key individuals or partners, you can take your business to the next level overseas.