Gone are the days when international markets were a target for only big brands. Today, startups are giving big brands a great run for their money both in the local and the international markets. It is, however, not all rosy for the startups as they often encounter immense challenges in their pursuit of international glory. This article looks at the six greatest challenges that startups must contend with before breaking into the international market.
- Cash constraintsStartups operate under a very limited budget, yet they must deliver services at the highest level for them to stand any chance of toppling the seasoned brands within their niche. They must pay their suppliers and employees in good time and because most of them rent premises, they have to pay their local and international landlords on a monthly basis. Now the challenge comes in when their invoices take too long be paid and they are, therefore, forced to borrow money in order to offset their monthly bills. More often than not, such constraints cripple international operations for startups.
2. Culture barriersADVERTISEMENT
Whenever you think of international trade, cultural barriers must come into play. An international brand must understand how people on all continents think and respond to different products and services. It must sponsor thorough research studies to establish whether or not its products will be accepted in different cultures and to understand how to package and advertise the product for each set of audience. Brands must also hire and train enough locals as salespersons and customer attendants in order to break the barrier of language. However, even though there are companies offering excellent translation services, still culture assimilation presents challenges.
Bottom line: Breaking the culture barriers is a tall order for the already cash-strained startups.FEATURED STORIES
3. Management Challenges
Without much money to hire enough qualified management personnel to run different international branches, startups are forced to manage most — if not all — of their branches from the head offices. Managing time in such a scenario could be a daunting task as the branches are located in diverse time zones. How, for example, can a manager based in New York manage a workforce based in Sydney or Being? A good way to manage the workforce is to find a local businesses in Australia or China.
4. Bureaucratic Regulations
Every government has its own set of unique regulations for businesses within its borders. Some of the bottlenecks you must contend with as a startup include registering your company, acquiring different certificates, and signing a host of legal agreements with government representatives as well as building owners who will let out their space to you. All these requirements take time to go through, might consume a huge chunk of your budget, and in the worst case scenario, could potentially kill your dream of succeeding in a given country.
5. Lack Of Brand Flexibilities
Your startup may have already established itself as a strong, reputable brand locally and has cultivated a unique employee culture. Once you take the business to the international market, however, employees and clients with a totally different mindset and set of traditions come in. That literally takes you to a crossroads: will you dilute your brand so as to accommodate the new entrants or will you assimilate the newbies so that they fit in your already-established brand? You don’t have the luxury of brand flexibility in this case so whichever decision you take can potentially make or break your brand.
6. The “Outsider” Tag
You are entering a community that has stood by one another for years and you are threatening to disrupt how they conduct their business. Integrating your business into this new setup and breaking the “outsider” tag might be your biggest challenge yet. You may have to hire inexperienced locals to work for you, order supplies from local distributors who you would otherwise not do business with, and enter into partnerships your brand doesn’t even need so as to be accepted as an insider. Before you find your international vibe, your budget and brand reputation will have been put through some unimaginable tests.ADVERTISEMENT
Are you keen on expanding your business abroad but don’t know how to defeat the six barriers, and others? Don’t give up just yet because you can still achieve your dreams with the assistance of a professional employer organization such asNH Global Partners. There are many such companies in Asia, particularly China, that handle all employer-related functions on your behalf. At a small fee, a professional employer organization will hire the best local talents for you, train them accordingly, and help you with your integration efforts.