Where should you expand your business to?

Before I begin, I want to make it clear that there is no one correct path or order in which to select the countries to expand to. You must assess your company’s strengths and what your specific product is. The most I can do without looking at your specific case is to give you a way of thinking about it and suggestions that would suit most businesses.

Expanding your business should always be looked at as a positive step, no matter what the reason for the expansion is. However, there are about 208 countries in the world, so which one should you expand your business to first? Let’s assume that your company is based out of the US or Canada. First, you would obviously look to establish yourself at home. Once you have done that, the logical next step would be your Canadian neighbors to the north or your American neighbors to the south. I advise this because of several factors including, but not limited to: NAFTA (the free trade agreement between the US, Canada and Mexico which allows most goods to cross those borders duty free), shared cultures, shared language and similar laws. Not every product will fit this mould as some products are good for one country but not the other. Usually, if this is the case it is because of legal/regulation issues. For example, pharmaceutical products need to go through government approvals before they are allowed to be sold in that country. Canada is known to be tougher to obtain approval than the US. Regardless, let’s assume you have already either entered both countries or for the reason I just mentioned, you can’t or it’s not feasible right now to enter your neighbors country. So where do you go next?

Well, if you are American you may think the next logical expansion would be to Mexico due to geography and NAFTA. Maybe, but not so fast. In today’s connected world geographic proximity is not as important as it once was. Shipping today is relatively inexpensive and is rather quick and reliable. Being able to cross a border without paying a tax is always good, but that might be offset by having to repackage everything in to Spanish. Moreover, Mexicans don’t earn as much as Americans and Canadians and thus may not be able to afford your product at the same price point. My next country, legal/regulation issues not withstanding, would be the UK, which is also a country that shares the language, standard of living and is similar enough in culture. With some things the UK is more lenient than the US and Canada, which can make life easier.

Now you’ve reached a fork in the road. On the one hand, you’ve got your foot in to Europe, but on the other, the rest of Europe is not predominantly English speaking. So what do you do? This is where it really comes down to your specific product and your company’s strengths. If you happen to have someone in your company that speaks another language then this may be a god time to utilize that and enter the country or countries that speak that language. This brings me to the most important advice regarding this topic.

It all depends on your contacts! Even if you initially planned to expand to your regional neighbor, then to England and the rest of Europe or in to Latin America, none of that will happen successfully if you don’t have contacts, partners or agents in the countries you want to expand to. If you have a good contact in Russia for example and he/she has government contacts there (a key factor for doing business in Russia) and this person has access to a company that is interested in distributing your product, then don’t say no just because it isn’t the next place on your list. Put your list aside and take advantage of the opportunities that are in front of you. This doesn’t mean that you should invest all the money that you set aside for that next country on your list, but definitely pursue this path and see where it leads you. I would generally not recommend you enter any country without having some local contacts that understand the local market and have the essential business contacts you need. Otherwise, there is a good chance you will be wasting your money. As a side note to this crucial advice, large internationally marketed trade shows are a good place to meet international contacts. I wish you only success with your expansion and I hope to see your product at a store near me soon.