Service providers in business-to-business markets are among the most likely companies to go international early in their company’s growth. It makes sense – there is no freight to ship, few trade barriers, and communication can happen over the Internet. Industries such as architecture, engineering, business consulting, law and accounting have all benefitted from global expansion. If your company is looking at growth opportunities in international markets, here are some considerations:
1. Where are my company’s services in greatest demand?
For market potential, most of us assume that the greatest demand comes from our home market. While that technically may be true, with over 200 countries in the world – chances are the highest market potential is elsewhere. World-class architects discovered decades ago that major Asian cities were seeking innovative architecture to stand out from competing cities. Once you identify your company’s your unique competitive advantages, find the parts of the world that put the highest value on that uniqueness. A great place to begin your international investigation is by attending an international conference or industry convention.
2. How does the level of competition compare with the level of market demand?
Market demand and competition are both unevenly spread geographically. The trick is to find markets where demand is rising and competition is not yet strong. For instance, companies selling services to technology companies often focus on Silicon Valley, California. But competition in this market for services is usually fierce. For high technology business concentration with less overall competition, service providers would do well to go to other tech clusters like Boston, Seattle, Austin, and Denver/Boulder. Outside the U.S. are tech clusters in Vancouver, Santiago, Tel Aviv, and Sydney. Keeping an open eye for this combination of market growth with lower competition will likely serve your company well.
3. How important is having a local presence?
I was recently thinking about this issue as I sat in my Denver-based office Skyping with my client based in Glasgow, Scotland. As an international marketing consultant, there are times when location is neutralized because of Internet connections (except for time zone differences, of course). But as soon as an international marketing project involves intimate knowledge of the local market, I need a local partner to help my client navigate localization, regulations, culture and language. In my case, local presence depends on the situation.
4. How does pricing/profits compare with your home market?
One of the best parts about being an international service provider is that your services truly do go out to the highest bidder. If the Japanese value what you do at a higher rate than the Ukrainians, then you will likely do more business in Japan. Your profit potential can be maximized to include travel and other international business expenses billed to clients.
5. What are the local regulations related to your services?
Services always feel so transferrable that it’s easy to overlook key local regulations that apply to you. Always check with an international business attorney for advice on how to structure your business plans as to not risk breaking laws in other countries. If your normal business attorney does not have this background, then your local embassy in that country can make a recommendation.
For more information about how to take your service company into international markets, please contact Becky DeStigter, The International Entrepreneur at +1-303-601-2566.