5 Mistakes to Avoid When Taking your Business International

Are you interested in business expansion, ytaking your business international in the coming months or years? If you are and you’re successful, you’d literally be a “one-percenter” in the U.S. small and medium sized business sector. You heard that right: less than one-percent of the 26-million SMEs in this country are considered international companies.

There are a few pitfalls that each and every business needs to avoid in order to give themselves the best chance at success. Keep reading to learn about the top 5 mistakes to avoid when taking your business international:

Businessmen in a sinking boat

1. Cutting costs when it comes to talent

Labor costs are obviously a big deal. Talent is one, if not the biggest cost of doing business. Cheap labor costs are also why many businesses outsource their manufacturing and customer service to less developed countries.

Seeking out the youngest, most inexperienced and/or cheapest talent is the biggest mistake you can make when expanding into new international territories. This applies to all areas of all operations, including local staff hired in said territories. Hire people who know what they’re doing instead and watch your international operations thrive.

2. Not hiring a local manager and/or management team

Make sure you recruit and hire top managers wherever you plan to set up shop. These people will have their ear to the streets and know what locals want. Use their feedback and allow them to prove their cost-effectiveness by helping you to increase profits and satisfy the needs of the local customers your company seeks to serve.

You simply cannot micromanage business operations from across the world as effectively as carefully vetted local managers can. Give them the power to make your business successful and you’ll avoid this second most common pitfall businesses seeking international reach run into more often than not.

With that said, make sure to establish clear expectations as to when they’re obliged to consult you or your team abroad for input on decisions. Keep bureaucracy and “red tape” paperwork to a minimum if possible. They’re there to make you money, not cost you money filling out needless request forms and reports.

3. Being a faceless entity across the sea

Just as you shouldn’t micromanage every aspect of your overseas business operations; you also don’t want to be a name that your international employees can’t put a face to. Or worse, some nasty curmudgeon who only shows up to stir up conflict and kick butt when things go awry.

At least try to visit in person for the company Christmas party (or whatever holiday celebrations are appropriate in the area). And when you do show up try to listen, learn and politely advise rather than criticize. You do have to keep good terms with those whom you need to trust from afar with your business after all!

With modern conferencing technologies, there’s simply no excuse to not have weekly scheduled conference calls with overseas management and other important members such as the local marketing team. As with the visiting in person scenario; listen, learn and politely advise rather than criticize whenever possible.

Businessman working on the airplane

4. Shifting to international on a whim and prayer

This mistake could easily make number one on this list. And there are a number of really bad reasons to start dumping resources into international growth when your business isn’t ready – or worse, on the verge of collapse!

If business isn’t going well in your established local market, there are very few situations where it would be prudent to expand abroad. You have to figure out what’s going wrong at home before you start trying to establish that same business elsewhere.

Then there’s the allure of an “emerging market”. Everyone’s telling you Asia’s hot and ready to explode on a new fashion trend or electronic gadget you can offer. What if it doesn’t and now you’ve opened up expensive local offices in Tokyo, only to go belly up because you’re carrying tons of debt, wall to wall stock, and no customers?

5. Failing to make globalization part of the plan early on

Start planning for expansion the minute you first open the doors to your business. This doesn’t mean jump the gun entirely – you may never end up going international in the end.

However, you do have to start learning the requirements early on, while also refining and documenting all the processes that make you successful in your original market so they can be transported and duplicated more seamlessly when the time comes.