Success for International growth. Do not stumble before you get to first-base.
The South African economy continues to grow at a slow rate, and whilst there are opportunities for niche products, disruptors and new technologies, ambitious businesses are increasingly looking at growing internationally. The statistics look very appealing; sizes of markets, growth rates and pricing models. But then there is the small question of how to make it happen, not just delivering but in a profitable, cash-flow friendly and manageable risk environment:
- Is your business model scalable? A lot of businesses have spent years evolving and refining their offerings so that it fits and works for South Africa. Along the way they have had their ups and downs plus (usually) a fair share of lucky breaks. In evolving for international markets does the offering fit in a suitcase and can you get it on a plane?
- Local supply and servicing arrangements are often very different overseas, not to mention local regulations, laws and ways of doing business. It can be very helpful to put a toe in the water or partner with local distributers before you look at putting your own team on the ground or entering into long-term agreements
- There are many ways of financing international expansion. One of the most straight forward is in partnership with an existing customer who is also in the target geography. This has the major benefit that you already have established protocols with the customer, and that you are not trying to learn a new client as well as a new market / geography. Whatever route you go, make sure investors have an appetite for the medium-long term, so that if / when things get sticky there is sufficient commitment to see the project through
- Getting the right people around the table is key to success, and it really helps to apply some project disciplines. A flexible disciplined execution works well but you must balance project disciplines with agility, as you learn and need to adapt
- One area that often gets over looked is the cultural differences as these are deeply embedded into the company and have been the cornerstone of previous success. These can be very real as one company we worked with really struggled with local employment practices as they were used to “doing whatever is necessary” to get things done and so were totally flawed by a strict 35 hour working week
- Lastly (and arguably most importantly) who is the leader that will deliver. Often senior management feel that their seniority makes them the natural choice but we would challenge that. Experience certainly has its place but in exploring and adapting younger and less experienced managers often have a greater ability to adapt, and less difficulties when it comes to relocating. Senior management mentorship is important as is recruiting locally It is a big wide world with many exciting opportunities but do make sure that you do not stumble before reaching first base
Article written by Richard Parker @ Pleiad Partners