How do I expand internationally? Where do I start? Which country should I start in? How much will it cost?  These are questions asked by many companies wanting to expand beyond the boarders of the United States. The Internet boom brought many businesses into Europe, in an era when money was no object, and large local presences were built up in a number of countries.  Both experienced and inexperienced people were lured by the promise of stock options, high salary and early IPO.
 
But what now? The international business market is characterized by the same caution, scepticism, and above all, return to sensible business behaviour that is now the sentiment in the US.
 
Despite the need to be conservative, you must acknowledge that you operate in a global economy. As a new business, and maybe a niche player, you need to be able to compete with your larger competitors. Focusing solely on the domestic market is not enough.  Many of your clients and prospects are international businesses and want a global solution and support.
 
Expanding internationally has many challenges. Think about the following issues.
 
•Do I hire directly or do I out-source?
•What country do I start in?
•What sort of structure do I use: subsidiary or branch?
•Where do I find the right professional advisors?
•What does my product need to do to comply with other national standards, e.g., language, health & safety?
•What is the right go to market strategy?
 
While the answers to many of these questions are situation specific to your business, lets let’s take a closer look at go to market strategy.  There are two routes one can take in establishing a remote sales and support operation. Hire a direct sales force or recruit a partner or series of partners.
 
My recommendation is that you hire a local sales team to initiate direct sales activities and once you have achieved initial success, begin to work with partners.  As a starting point one or two people are often sufficient, consisting of a sales person and pre-sales person.
 
Particularly when the remote office is small, a key to success is being able to support your local sales team from your headquarters.  It is critical to establish regular and effective lines of communication.    I strongly urge that a single point of contact be established that is a liaison and oversees the new office.
 
Consider the following:
 
•Management. - No matter how good the team is it needs leadership and support from a parent. Someone needs to spend time in that geography, initially helping get it off the ground but also ensuring that it is supported and remembered and that there is someone back at headquarters that can deal with issues.
 
•Technical Support - Provide the local team with access to all the latest releases and technical information. Provide a feed back mechanism to product development.
 
•Marketing Support - Provide the local sales team have the latest information.  Ensure that marketing material and programs reflect and acknowledge the international presence.
 
As the office grows the sales team will need to be augmented by additional operations management.  Unless local support of customers is the primary challenge, the skill set of the operations manager needs to be someone who is sales and marketing savvy with an emphasis on sales.
 
Once you achieve some success in the local market, you should focus on building a partner network and other channels in order to leverage your direct sales operations. Remember, channel management requires as much support as any direct sales operation in order to leverage results.  Channel partners will often need you to sell side by side with them, particularly in their first sales.
 
How does one establish a local sales team?  Finding local advisors can jump start your entry into a market as well as minimize your fixed costs. For example I offer my clients interim sales services as well as access to a network that includes potential customers, partners, analysts, press and industry bodies. I can also assist with recruiting the full-time team.   This has proven key and valuable for both existing operations but in particular in establishing new businesses.
 
In any event, be sure that you have carefully budgeted for the total expense and long-term commitment of entering foreign markets.  Success will likely take longer than expected and it is better not to enter a market at all than to abandon a market due to missteps.
 

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Paul Rose has been affiliated with the Mercator Group since 1999 and provides sales and marketing management and go to market services for US companies expanding into Europe.  Paul can be reached at paul@rose.freeserve.co.uk.