Once you’ve confirmed your commitment to internationalize your business, look at where your company is at right now. This involves reviewing your existing strategy and goals, how easy it is for your suppliers to increase their prices, how easy it is for your customers to drive prices down or switch to other suppliers, how profitable your sector is currently and the long-term profitability of the sector, how easy it is for other businesses to enter your market, the number and capability of your competitors and the key challenges facing your business now and in the future.
Your Ambition and Commitment to Succeed
How ambitious are you for your business? Is your company a lifestyle-business or are you growing the business for scale? Right from the start, you need to be sure you want to embark on an exporting journey and believe you can convert this ambition to overseas business success. Whatever your vision, you need to commit to a structured strategic plan that sets out the pathway to get to your company to where you want it to be.
Scalable Business Model
To achieve sustainability and success in international markets, CARIFORUM companies need to scale, regardless of their stage of development or industry sector. Scalability needs to be at the heart of your business and revenue model; however, not every company has a business model that can scale. Things to ask yourself are whether it is possible for economies of scale to be achieved in your business (do production or service costs continue to fall as volume increases)? Also consider the cost of acquiring new customers and the cost of servicing customers in multiple, overseas markets. What about the long-term revenue and profit that can be derived from these customers?
Ownership Structure and the Management Team
Many companies decide against exporting because of lack of resources, insufficient market intelligence and the high risks and uncertainties that come with trading internationally. There are a number of organisational factors to consider when exporting such as the commitment of the management team to fund an international sales programme and put in place the necessary staff to deliver increased production capacity. It is also necessary to decide upon an international sales structure or route to market. This could be via an agent, distributor, licence agreement, partnership and setting up an overseas office or through acquisition.
Companies should also consider whether they are prepared to bring in additional investors to financially strengthen the company or bring in external expertise –key players from the industry – to strengthen their board. This could have implications for the ownership structure of your company.
Building the Company Board Structure
In many small companies, particularly family businesses, the role, structure and composition of the board of directors can vary significantly. When looking to grow your business internationally, consider if the existing ownership structure is adequate or whether new international, external expertise should be brought in.