Survival Guide: Doing Business Internationally in a Global Crisis
By Cornell McBride, Jr., President, McBride Research Laboratories | 06.08.20
COVID-19 has hit hard, but now is the time to supercharge your business plans to get back on track, says Cornell McBride, Jr.
When I rose to be president of Design Essentials, I was in the unique position of having watched the brand grow through its 30 years in the hair care industry. The brand’s growth, both on the domestic and international scale, was not an immediate success story but one of meticulous planning that got us to where we are today as a top natural hair care brand with an international footprint that continues to grow. Before setting foot into new territory we intensely researched our market and potential partnership options to ensure that we could diversify our sales through well-placed sales channels upon launch, serving to expose our brand to a large number of our target audience.
Similar to Design Essentials, many businesses within the beauty industry find that their international growth sometimes rivals or even exceeds their domestic market, creating a safety net in the case of a slow sale season or an unforeseen natural disaster that affects one market but not the other. For this reason, it would be a mistake to not at the very least take a look into how you can begin to expand your business by reaching your potential customers who are waiting just across the pond.
So, if you’re looking to add “international expansion” to your list of accomplishments in 2020 or the near future, below I’ve provided 4 of my key lessons to help beauty businesses effectively plan for establishing and retaining an international footprint through both an economic boom and recession.
Lesson #1: Evaluate the Potential of Various International Markets
As with any marketing plan, it's vital to have a deep understanding of the nuances contained within the new markets which you are preparing to enter. The last thing you want to do is break ground into a market that is unstable or doesn't have the buying power to support your business, which means it's imperative that you do your due diligence in assessing the viability of your desired market.
By analyzing the demographics of new territories thoroughly and looking at the factors which relate to your target audience, you can pick not only the best country but also the ideal town and neighborhood that'll put you right in the path of your target customers.
Lesson #2: Find What It Takes To Move Into The Neighborhood
Before you get too excited to pick a location to kick-off your global expansion, you must familiarize yourself with the commerce regulations and laws native to the particular territory that you are planning to expand into. Expanding on an international level has its own share of unique financial requirements, including local taxes and the requirements which must be met to conduct sales. This is where using your extra downtime wisely comes into play because you want to ensure that you create a solid financial trajectory that takes into account these unique expenses. Furthermore, you’ll need to plan to have anywhere from 2-3 years worth of cash designated to fuel the business during it's "startup" phase.
Being able to grow a business to the point of global expansion is an amazing accomplishment, and with that accomplishment it’s vital to have adequate manpower and financial backing to continue that success. Taking inventory of your associated costs and resources needed to fuel the push forward is vital for the livelihood of your soon to be global footprint.
Lesson #3: Establish Your Financial Investments And Options
When making your move into a new global market, consider the cost associated with the various options available to you when breaking ground in a new market. With options like a physical storefront, e-commerce partnership, or selling products through wholesale vendors, each business venture has its own unique set of costs and challenges. Understanding the different benefits that each of these options presents allows you to prioritize financial decisions for your business. For instance, wholesale products sold through a third party vendor in another area of the world can be one of the cost effective methods for expansion, but a storefront can bring unparalleled brand recognition and provide an immersive customer experience.
Lesson #4: Utilize Technology And Form Beneficial Partnerships
While countries around the globe are taking the necessary steps and precautions to mitigate the effects of COVID-19, the repercussions of this virus have undoubtedly taught us that we must have backup plans in the face of possible future health outbreaks or unforeseen disasters. Take lessons learned during this down time to incorporate adaptive measures into your business plans, such as how you can transition your business to provide online and contactless services. Additionally, utilizing online communication platforms to form a global team which can communicate from thousands of miles away effortlessly, with project management, meeting, and communication tools that can be used via smartphone or computers is also crucially important for global expansion planning.
Lastly, don’t be afraid to work in tandem with other companies and consulting firms in the post-COVID-19 world. As businesses seek ways to rebuild their infrastructure and recoup losses caused by the economic repercussions of the virus, we should aim to help each other become stronger by working together. Strategically engaging in mutually beneficial partnerships with manufacturers and retailers, and/or with consulting agencies will help you to bolster your international marketing plan through their unique expertise and connections.
As we continue to monitor the events of COVID-19 and prepare to reopen our businesses in the new normal ahead of us, which of these lessons will you use to help your business expand and grow? Now is the time to challenge yourself and do you research, which is vital when expanding internationally as each market carries a different set of regulations and taxes. In addition to arming yourself with adequate research, spending time to create a thorough 2-3 year business plan is key to substantial long-term growth in an untapped market.
For more business tips and advice, in addition to more information on how you can work with me directly as a speaker or business consultant, visit cornellmcbridejr.com.