A Case for Growing Your Business Overseas
Securing profitable sales remains the number one challenge for businesses, ahead of (yes, even!) access to finance. Almost all companies will have experience in selling in their home market, but investing in growing overseas should be on the agenda of each company, small and large, since effective international sales are a proven driver of superior performance2. There are several important reasons for expansion overseas – some are self evident. At least one might be a surprise to many.
A Large Well of (potentially) Untapped Ddemand
Some companies have achieved all they can in their home market and exporting provides the only way to significantly grow sales further.
Diversification of Risk
The markets in different countries can be considered as a portfolio of different opportunities and risks. Not only do economic forecasts for the major market economies vary significantly, other drivers of demand also vary. One example of risk diversification is the strategy adopted by UK companies selling medical technologies, whose initial markets are often outside the UK because of the slow rate of adoption by the NHS.
The BIG Positive Unknown: Indirect Benefits
Companies are almost certain to reap other and potentially large rewards from their international expansion process, such as new ideas for product development, operating efficiency or sourcing that would otherwise not have been considered. While we do not have statistics to prove it there is
overwhelming anecdotal evidence, eg a mechanical engineering company in the UK found that its new master distributor in the USA not only added 20% more sales but also offered ideas and opportunities that led to a reduction in production cost of over 15%.
Obviously expansion overseas requires new approaches and solutions, and might not be suitable in all situations. Fortunately there are many different routes to markets overseas, with different costs, time frames and risks associated. Rather than seeking sales in new regions in their own country, with the right approach and support even smaller companies might find it more beneficial to expand sales internationally.
GBDN-UK is a specialist company focusing on international issues – helping UK companies sell overseas and overseas companies to sell into the UK. Frank Van den Berg, Managing Director, GBDN-UK, Tel: +44 (0) 8450 558936 email [email protected]