Before you consider Going Global, Go Louisiana and Go Texas

Going global can be a very smart and lucrative part of any growth strategy. But dealing with foreign trade laws, logistics, business practices (formal and informal), languages, and time zones can introduce substantial risks to your business model. It is because of these risks I advise my Georgia-based clients, “Before you go global, prove you can go Louisiana and Texas.” 

Why do I suggest this course of action?  By setting up the processes and procedure necessary to be successful in another state you mitigate several of the inherent risks of going global.

Delivering a product or service locally should be quite familiar to you.  If you are a successful company then you likely know your target customers well, you know the competitors you face, and how to get product to their door or how to deliver the specialty services you are known for.  All of this is familiar territory.  Now what would you do if I challenged you to be equally successful in a state a time zone away.  How would you pick the state, how would you sell your product or service there (direct or through distributors), how would you specifically deliver the product or service? How would you support those sales from Georgia?  How profitable would you be doing this?

Now what if I were to challenge you to do this yet again in a state say two time zones away?  What I hope you will do is develop documented processes for analyzing new markets.  This can be done on your own or by engaging a service provider.  And with each new state you will apply lessons learned and fine tune these “export” processes.  The same holds true for processes governing customer support, logistics (delivery of the product or service), employment, quality control and accounting procedures (state taxes).

By going Louisiana and then, say, Texas before going global you will have put in place and exercised many of the same processes and skills necessary to be successful abroad.  These include:

• new market analysis
• competitive analysis
• logistics
• new territory marketing
• new territory sales
• learning and adapting to new tax laws
• learning and adapting to local business laws
• learning and adapting to new accounting procedures (taxes)
• providing customer support after local business hours

The good news is you will be mastering these new skills in an environment where the language is the same, the business culture is quite common, the sales techniques similar, and the overarching governing business and tax laws something you are familiar with.

If, after you succeeded in doing business in Louisiana and Texas, you still feel going global is right for your business, you will only need to master a fairly small number of processes still unfamiliar to your business. Some of these include:

• doing business in a foreign language
• Foreign Corrupt Practices Act
• currency exchange
• foreign and U.S. trade laws

Don’t get me wrong these can be quite intimidating challenges to overcome and will require expert assistance.  But by now your company will have already proven to themselves it can adapt and succeed in new environments. This is just one more evolution. 

So remember my phrase, “Before you go global, prove you can go Louisiana and Texas.”  Your success will be that much more assured.

Mike Gomez is the founder of Allegro Consulting, an Atlanta-based business growth specialty firm.  He has served as a program manager and business development executive in both Fortune 100 companies as well as small businesses. He has conducted business in over 20 countries. Mike is a guest lecturer at GaTech on international business and at UGA on business planning and sales strategy. He can be reached by phone at 678-908-8433 or by e-mail at m.gomez@allegroconsultant.com. Visit http://allegroconsultant.com

3 Things That Will Surprise You - Entering the U.S. Market

When consulting for international companies expanding into the U.S. market I’ve picked up on a few common issues that consistently catch the leaders off guard. “I had no idea ….” is how they typically started the conversation.
Let me share the top three:

1) I had no idea that it would take so long to establish a presence here (in the U.S.).

“It seemed to take forever to do all the mundane tasks necessary to get established,” said one client. “What made it worse was the home office had no comprehension of the time or effort it took to get the company up and running. Once they saw I had an internet connection they assumed we were in business and immediately began assigning tasks and planning visits. I had to tell them to STOP!”

Establishing banking credit, securing transportation, making living arrangements, turning on utilities, selecting an office location, furnishing that office, securing a phone and internet service, establishing the proper legal framework and setting up the bookkeeping is time consuming and can be overwhelming especially in a foreign land. Don’t underestimate the amount of time and resources this can demand. And be wary of the business vultures who will prey on your lack of local knowledge. Rethink the traditional start-up model. Leasing temporary furnished and supported office space while you get your bearings can be a prudent alternative and save a lot of the early headaches.

2) I had no idea how geographically large the United States really is.

A client shared this story, “….and after our meeting in Los Angeles we can drive to San Francisco and meet with our customer there before flying back home.” Upon telling the San Francisco client his plan he was embarrassed to discover it can take anywhere from 7-9 hours to drive that distance. Needless to say he had to plan for an additional overnight stay.

The good news is the United States is a large market. The bad news is it is a really large land mass and as such takes an unexpected amount of time and travel budget to get around. For example, the entire country of Germany is slightly smaller than the state of Montana. Spain is twice the size of Oregon. Japan is slightly smaller than California and Israel is almost but not quite the size of New Jersey. You can be certain the shear size of the United States will impact your sales, marketing, and logistics strategy more than you might have first anticipated. Keep this in mind when selecting a site to launch your U.S. endeavor. Being near a major U.S. airport can make life a lot easier for you and your traveling employees.

3) I had no idea that the sales cycle will take this long.

Though I hear this comment quite a bit I doubt this is unique to the United States. I think this would be the case for any foreign small or mid-sized business (lacking name recognition) entering a new market. It seems that no matter how hard you work to get a response to an email, a request for an appointment, a proposal, or a selection decision it always seems to take twice as long as you remember it taking at home.

A client recalled that even after multiple visits she was stunned to hear, “who are you again?” from a business she was calling. Partnering with established U.S. companies can speed this process. Leveraging a well connected business network is also an effective strategy to move you to the front of the line.

Prudent, conservative business decisions accompanied by a well vetted local sales and operational strategy makes the difference between success and failure – even in the lucrative and vast U.S. market. Delaying major expenses such as permanent office space until you become more familiar with your surroundings and daily routines is also a wise move. And finally, leveraging partnerships and a good business network can open the right doors and accelerate the sales cycle immensely.

Welcome to the United States of America.

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About the author:
Mike Gomez is he founder of Allegro Consulting, a growth specialty consulting firm located in Atlanta, GA.  Allegro helps business to define and implement new growth strategies. Mike has worked in over 20 countries and has an accumulated sale record of $10B.