Exciting as it may seems, driving business expansion into unknown territories can be daunting for most SMEs.
There are many ‘minefields’ which one has to tread cautiously. Cultural differences, political and geographical consideration, economic potential and availability of resources must be taken in account.
Clear business objectives should be laid out (in terms of what the business aims to achieve from it). A business should also assess its current business model and sustainability in the last five years. This can be done through gauging and analysing the current business position in the market and checking if it is replicable for implementation outside its domain.
When embarking into new territories, many variables and challenges in multiple depths and breadths come into play. Having the right resources is crucial in determining whether or not it is ready for expansion. These resources include people, time and money.
Fundamentally, a dynamic team that is resilient, understand local cultures and economics, efficient and effective in their planning and execution of strategies are most important.
With a very lean staff strength, it can be very tough to manage a global enterprise together with its existing local market. Hence, before the business proceeds to execute the plan, the business must first ensure that it has enough manpower to facilitate the expansion. When a business expands, its people need to be fast to adjust and adapt with the changes that come with it. Without a right team, there is a high possibility that the expansion plan may go haywire in various directions.
Expansion also means increased responsibilities on the employees as they are now having bigger roles and heavier workload. Thus, employees need to be well trained and equipped with the right skills, tools and competencies in order for them to be in control, focused and efficient enough. With this, they are able to juggle between different time zones and work well in a dynamic and multi-cultural working environment.
It is also important for a business to have sufficient funds or capital required to support the expansion. Without proper planning, getting hold of these funds can be very challenging. A constant review of the financial business plan is encouraged to be conducted in order to be assured that there will be enough funds available to secure the expansion.
SMEs can consider tapping on the funding schemes available from (International Enterprise) IE Singapore and SPRING to help aid the expansion.
Time plays an essential role in determining whether or not a business is ready for expansion as it is not done overnight but instead, it is a gradual process. The business should not rush into its growth because time is required to plan, develop its people, enhance its resources and monitor the progress of the expansion.
In order for the business to successfully penetrate to a brand new market, there are several other questions that need to be addressed. Is the opportunity worthwhile and sustainable? Is there a need or demand for the product or service in the target market? Who are the direct and indirect competitors?
Once those questions have been answered, it can now start to effectively plan out a realistic marketing plan and timeline for the expansion. Market research is vital for every business, and firms should try to conduct the exercise more than just once.
Through conducting a market research, the business can obtain a deeper understanding of its target market. It is a very useful and valuable information that can help it in finetuning its expansion plans. It is advisable for businesses to have a “think global, act local” mindset so that they can better understand and cater to the needs of that particular target market. This is especially so because the needs and concerns varies with different markets (in terms of culture differences, demographics, cost/standard of living, among others).
However, the success of its expansion is not guaranteed. Contingency planning provides a way to anticipate certain changes and the how-tos to overcome and act accordingly when the desired outcome is not achieved or when the unforeseeable happens.
This is why effective planning plays a very important role when expanding a business. Planning helps to develop and visualize better on the things needed to be done. Without taking this important step, the business might get lost along the way. As a result, a great amount of time and resources will be wasted.
Therefore, a business should plan effectively and consider getting all elements in place before spreading its wings and expanding into other markets outside its local territory. These are considered to be the pillars of a stable business’s en route to expansion. Nothing like having the experts work with you on untrodden territories. Engage a coach or a business consultant to help steer the way forward and to reduce possible roadblocks along the way.’
Angeline V Teo is the Managing Director of d’Oz International Pte Ltd and President of PEPWorldwide (Asia) Pte Ltd, a learning and development solutions partner. As a certified Master Consultant and Coach of PEP (Personal Efficiency Program), Angeline has helped multinational organizations and the employees to improve on their work performance and to excel in their roles. To engage Angeline, please email firstname.lastname@example.org or visit www.d-oz.com for more information.