Being the CEO of a local company, are you considering expanding into other regions or countries? Obviously, such a decision usually means reaching a wider audience, attracting new customers, and increasing revenue. However, none of this may happen if you follow in the footsteps of companies that have made serious mistakes. Expanding your business abroad can be a critical event if you ignore several important aspects.
There are many things you should seriously consider before entering new markets. For example, think about using payment orchestration to combine gateways into a single platform that will work seamlessly in the countries you plan to cover. When scaling, it is important to consider local characteristics, including traditions, culture, and much more. Ignoring these things can lead to low return on investment. In this article, we will share with you some common mistakes that businesses make when scaling.
1. Ignoring Local Specifics and Culture
Cultural differences are one of the most popular aspects that are underestimated in situations when companies are expanding into new markets. The ways of doing business, communication patterns, and even the expectations of the consumers vary extremely between regions. What works in one country can be out of place or even offensive in another country. It is an area where marketing campaigns and customer engagement efforts are usually ineffective without investigating local behaviors.
Knowledge of local culture is more than language translation. It involves the culturalization of branding, modification of offering customer services, and acknowledgement of traditional behaviors that guide buying patterns. Companies that do not incorporate these subtleties are likely to gain a bad reputation even before they get on their feet. The process of successful growth begins with cultural diligence and an ability to learn about the community you want to serve.
2. Lack of Clear Plans and Scaling Strategies
Another trap of expanding a business that the businessman should avoid is due to a lack of a structured plan. All organizations attempt to expand into new markets with zeal and motivation without having any set targets or parameters of success. Such an absence in direction can lead to resource wastage, lack of consistency in the operations, and confusion among teams. When there is no roadmap, decision-making will be reactive rather than strategic.
What do we mean? A powerful scaling plan must define the business model, growth metrics, financial needs, and the risk management processes. The leaders should make sure that all departments are informed about how the expansion fits the vision of the firm. Proper planning also creates confidence among the internal structures and instills confidence in investors and business partners.
3. No Reliable Payment System
Undoubtedly, since this moment you will have to process more payments than you ever did before. Moreover, you should understand that other countries may use different methods for online transactions on websites or in applications. What should you do in this case? How can you prepare your payment system for future scaling?
- First, you need to review how your payment system on your website or app has performed in the past. Did your customers encounter any problems during the payment process?
- Increase the number of payment methods available on your platform. As a reliable solution, you can choose one of the popular payment orchestration platforms, such as Tranzzo.
- Adapt to local legislation. Each country may have its own specific laws, which may affect your payment acceptance system.
Instead of working with multiple payment gateways on your own, you can easily optimize these processes. Consolidate all payment gateways through a single platform that supports service in multiple countries and a large number of necessary payment methods. Moreover, this is one of the ways to reduce business costs without sacrificing the quality of products/services.
4. Hiring the Wrong Local Talent
A common misconception that many businesses commit is to transfer all their current staff to branches in a new market. On the one hand, devoted employees are a source of consistency. However, they don’t know what strategies to employ in an unfamiliar business environment.
A good presence can be created by employing professionals from the region. The local talents offer realistic experience, well-known connections, and unrivalled knowledge of consumer needs. The knowledge of the employees in the organization should be combined with an understanding of the locals, and hence the formation of a balanced team that adjusts rapidly.
5. Neglecting Supply Chain and Logistics Planning
Another serious, though neglected, dimension of expansion is supply chain and logistics. Most organizations don’t appreciate the complexity that distribution networks may take in the new market. Unplanned tasks will cause procrastination, add expenses, and make customers unhappy. Unless there is effective infrastructure and vendor management, scaled efforts will fail due to operational inefficiency.
Leading enterprises read the most promising supply chain trends and adapt them to their target market’s practices. This involves knowledge of the local laws, the transportation infrastructure, and the known risks such as delays at customs or non-availability of resources. Good logistics planning will ensure that products are distributed efficiently, that costs are kept down, and that customers will maintain this trust.
Closing Remarks
Any successful international entrepreneur will tell you that entering new markets and scaling up are complex processes. Expanding your company into other regions or countries is where you are sure to encounter pitfalls and challenges. However, you should avoid making silly and common mistakes that could cost you dearly. Pay more attention to studying the local market and ensuring that your logistics are correct.
Common mistakes include ignoring local characteristics and insufficient preparation for accepting payments. You should forecast the approximate number of customers and potential profits in advance to calculate the load your payment system will have to withstand. To work in another country, it is best to find a payment orchestration solution. Collaborate with trusted payment service providers to ensure the best experience for your customers. One example is Tranzzo, which offers many excellent solutions for companies looking to enter new markets.
