In order to internationalize successfully, SMEs have to lower the risks and uncertainty; you can do so by choosing the right strategy and methods. To go international, you have to plan for the process to happen. Market knowledge is a key element to come up with a good strategy and method for internationalization. There are also some other important factors such as business network, previous experience and skills of the management team, role of the owner-manager, financial resources, government agencies, age and size of the firm, entrepreneurial abilities and services etc.

Below we present the first steps to be taken to internationalize your business.

Is my company ready?

Before you go global, take a look in the mirror. Does the company have the communication skills required for a company competing in a globally interconnected economy? Is the company ready to adapt to the cultural differences in a new country environment? The world’s move from an industrial to digital era means it is easier now for SMEs to become multinational. It also means a different way of communicating, a different way of giving signals.

Pick your potential expansion markets carefully

The first step in this direction should be to trace the market (or markets) in which we want to develop our business and analyse its potential. If you are new to the global game, look for markets that are similar to yours, neighbours, those would be the easiest to export to and do business with. Prioritize lower trade barriers, proximity, currency, and cultural similarities. A more experienced company can tackle markets that are higher on the degree of difficulty. Market research should take into account the local specificity of a given country – its history, culture, the mentality of residents, business etiquette or industry characteristics. Another issue is market analysis in terms of competition, prices and availability of goods or services that you offer. It should be taken into account, for example, the need to adapt our offer to local conditions, as well as obtain the necessary certificates or authorizations.

Another topic is planning the form of entering a given market, i.e. whether we want to act directly or e.g. through local representatives. The selection of sales channels, promotion tools as well as logistics is also important. It is worth defining and analysing the target group and local consumer behaviour patterns carefully, taking care of the website dedicated to local recipients and planning a communication strategy tailored to their specificity and expectations.

Think twice before you jump

Answer these questions:

• Will your product sell to local customers? Investing in focus groups and a market segment analysis will narrow the risk of getting it wrong.
• Is your product price-competitive? Look not only at the locally produced competition but at imports from other countries (like China ex.pl)
• Do you have brand recognition or must you build it? If brand recognition is important to your product’s sales, it will take money and time to build it, and that should be factored into your cost budget and sales growth forecasts.
• Are your tax and banking affairs in order? Planning a tax-efficient structure and local operation includes complying with local tax codes and applicable double-tax treaties with the potential country and any intermediate overseas entities that are part of a tax-optimized structure.

Prepare a Strategy

If you answered the previous questions and you are still interested in internationalization. It is time to choose an entry market strategy.

The decision to internationalize is not a straightforward one, but a long and complex process. It requires planning and a high degree of flexibility, the ability to adapt and, above all, patience. Internationalization brings great opportunities but also great risks. However, in the long run it is probably riskier not to internationalize at all.