Tips for financial or ecommerce startup targeting foreign market
Many startup CEOs wake up with desire to go global after successful piloting their product or solution in domestic market. So, you decided that it’s the right time to scale your business. Here’re some tips that help you not to miss something important.
- Research the market first. It’s necessary to look at the opportunities in the market you’re thinking of. Is there a demand? Really? How much customers are there in that country who can potentially be yours? Is there an actual need? Have a quick look not only at figures, but at some info about customers’ preferences, culture, behavior and traditions.
- Know your competitors. Entering a new country market, you can face with severe competition. But it’s only one side of the problem. You may face competition from new entrants, and you don’t exactly know where the competitors can come from – maybe, they can come from foreign markets, like you. So, try to research not only domestic, but also global competitors.
- You really think you’re unique? Yes. Maybe. But probably some team in your target country is already working on solution similar to yours. Pay some attention to the country’s startup crowd.
- Is your business model applicable? The common problem startups, especially, financial, face entering the foreign market, is compatibility with foreign legislation and regulations. Besides, how do you think you can collect money from customers? Spend some time researching payment infrastructure.
- Do you have money for entering the market? For tech startups entrance barrier can be relatively low. There’s no need to establish physical presence at piloting stage. But you need resources for adapting your product to the market needs, to reach your potential customers, to support existing clients in a new market. Sales and marketing costs arise even before you decide to open rep.office and start hiring additional personnel.
- Local investor can solve all problems. It’s naïve to think so. To get an investor abroad, you should have some business established in the country of presence, and have some good traction. Majority of angels and institutional investors prefer to invest in a business they can reach on a daily basis. Not by phone or skype. Personally. So better look for potential business partners, clients (if you sale B2B solutions). They can help you to understand the market and to open the door to it. Once you are there, you can start looking for investors.
- Is the target country your “land of promise”? Maybe, you’re targeting the country you want to settle in. Prepare your team for future relocation. Set up the best possible legal structure. Visit the country to make some business connections. Study visa regulations thoroughly, consult the local legal advisor. And prepare a “Plan B” – what you can do if your business will not reach the target volumes as quickly as you expect, and you still have to make your living.