The Three Major Pitfalls When Expanding Across Borders

The Three Major Pitfalls When Expanding Across Borders

The Three Major Pitfalls When Expanding Across Borders

The Three Major Pitfalls When Expanding Across Borders

Discover the crucial steps for a successful international expansion and learn to navigate common challenges in international growth

Discover the crucial steps for a successful international expansion and learn to navigate common challenges in international growth

Mollie-guides

May 25, 2023

When companies have extracted (almost) everything possible from their product in their home country, they typically face two choices: introduce a new product or venture into foreign markets. The latter often involves looking at neighbouring countries, seemingly a safe choice, as there shouldn't be much difference between consumers in nearby nations, right?

We polled over 400 managers of Dutch companies on their preferred country for expansion. Predictably, Germany (20%) and Belgium (16%) topped the list. However, even when expanding to these countries, there are various considerations to take into account. This blog post provides insights into the three major pitfalls and how to avoid them when taking the leap across borders.

For a comprehensive guide on successfully expanding abroad, you don't have to wait until the end of the blog; you can get started right away: Download the Cross-border manual: the guide to successful international expansion.

When companies have extracted (almost) everything possible from their product in their home country, they typically face two choices: introduce a new product or venture into foreign markets. The latter often involves looking at neighbouring countries, seemingly a safe choice, as there shouldn't be much difference between consumers in nearby nations, right?

We polled over 400 managers of Dutch companies on their preferred country for expansion. Predictably, Germany (20%) and Belgium (16%) topped the list. However, even when expanding to these countries, there are various considerations to take into account. This blog post provides insights into the three major pitfalls and how to avoid them when taking the leap across borders.

For a comprehensive guide on successfully expanding abroad, you don't have to wait until the end of the blog; you can get started right away: Download the Cross-border manual: the guide to successful international expansion.

When companies have extracted (almost) everything possible from their product in their home country, they typically face two choices: introduce a new product or venture into foreign markets. The latter often involves looking at neighbouring countries, seemingly a safe choice, as there shouldn't be much difference between consumers in nearby nations, right?

We polled over 400 managers of Dutch companies on their preferred country for expansion. Predictably, Germany (20%) and Belgium (16%) topped the list. However, even when expanding to these countries, there are various considerations to take into account. This blog post provides insights into the three major pitfalls and how to avoid them when taking the leap across borders.

For a comprehensive guide on successfully expanding abroad, you don't have to wait until the end of the blog; you can get started right away: Download the Cross-border manual: the guide to successful international expansion.

When companies have extracted (almost) everything possible from their product in their home country, they typically face two choices: introduce a new product or venture into foreign markets. The latter often involves looking at neighbouring countries, seemingly a safe choice, as there shouldn't be much difference between consumers in nearby nations, right?

We polled over 400 managers of Dutch companies on their preferred country for expansion. Predictably, Germany (20%) and Belgium (16%) topped the list. However, even when expanding to these countries, there are various considerations to take into account. This blog post provides insights into the three major pitfalls and how to avoid them when taking the leap across borders.

For a comprehensive guide on successfully expanding abroad, you don't have to wait until the end of the blog; you can get started right away: Download the Cross-border manual: the guide to successful international expansion.

Our tips for international expansion

1. Crossing the Border Without Preparation

In the Dutch TV show 'Ik Vertrek' (I'm Leaving), we witness individuals completely uprooting their lives and moving abroad to start a bed and breakfast with little knowledge or preparation. They often lack proficiency in the local language, haven't bought a house yet, and contracts are signed by intermediaries. A scenario destined to fail. As a business, you undoubtedly want to avoid such situations. Thorough preparation is crucial before deciding to expand abroad.

Consider this preparation time as research time. It may reveal that this is not the right time to expand or that you have targeted the wrong country. But if all signals are green, be sure to involve a local expert to assist with the research. Do they believe that your product, in its current form, will resonate with local consumers? This is a relevant question, as 22 percent of the managers in our survey don't believe their products would sell well across borders. A local expert can help determine the necessary tweaks for the new audience.

The preparation period is also an excellent time to identify your competitors in the new market and understand your unique selling points (USPs).

2. Lack of a Local Approach

Ideally, we would like to copy and paste our business model from the UK into a new environment. While there might be aspects you can adopt, a local approach is essential. Consider translating your website and initiating social media activity in the local language.

Also, think about building brand awareness there. In the UK, it's assumed that consumers know your company name, but that may not be the case abroad. You need to work on your credibility there. Being locally present can help, such as opening a local office with employees from that country. More than half of the respondents in our survey (55%) indicated they would only expand if they could open an office in the new country.

However, you can start small by attending key events in your industry. It's an excellent opportunity to establish new contacts. You might even give a lecture to showcase your expertise. Keep in mind that building brand awareness in a new region will require more time and money.

3.Insufficient Knowledge of Local Laws and Regulations

A common pitfall for many companies is having insufficient knowledge of local laws and regulations, and whether these rules apply to their business. In our survey, 31 percent of managers stated that their organisation is not adequately aware of the financial regulations in other countries. Consider different tax rules or VAT rates that you may need to apply across borders. It is advisable to hire a local financial expert to guide you through these regulations.

Also, pay close attention to whether your product needs to meet different requirements abroad and if it falls into the same product category. You may need to make minor adjustments to your product or apply for certain permits before you can actually sell your product.

A well-prepared person counts for two

The success of expanding across borders depends on thorough preparation and understanding of the local market. Take the time to delve into the market, identify trends in the country, and connect with the right people who can further assist you with their local knowledge. In doing so, your investment in another country will pay off double, even in these economically uncertain times.

Want to learn more about how to best make the leap abroad? Download the cross-border manual and learn from experts who have already taken the step.

Download the Cross-border manual.

1. Crossing the Border Without Preparation

In the Dutch TV show 'Ik Vertrek' (I'm Leaving), we witness individuals completely uprooting their lives and moving abroad to start a bed and breakfast with little knowledge or preparation. They often lack proficiency in the local language, haven't bought a house yet, and contracts are signed by intermediaries. A scenario destined to fail. As a business, you undoubtedly want to avoid such situations. Thorough preparation is crucial before deciding to expand abroad.

Consider this preparation time as research time. It may reveal that this is not the right time to expand or that you have targeted the wrong country. But if all signals are green, be sure to involve a local expert to assist with the research. Do they believe that your product, in its current form, will resonate with local consumers? This is a relevant question, as 22 percent of the managers in our survey don't believe their products would sell well across borders. A local expert can help determine the necessary tweaks for the new audience.

The preparation period is also an excellent time to identify your competitors in the new market and understand your unique selling points (USPs).

2. Lack of a Local Approach

Ideally, we would like to copy and paste our business model from the UK into a new environment. While there might be aspects you can adopt, a local approach is essential. Consider translating your website and initiating social media activity in the local language.

Also, think about building brand awareness there. In the UK, it's assumed that consumers know your company name, but that may not be the case abroad. You need to work on your credibility there. Being locally present can help, such as opening a local office with employees from that country. More than half of the respondents in our survey (55%) indicated they would only expand if they could open an office in the new country.

However, you can start small by attending key events in your industry. It's an excellent opportunity to establish new contacts. You might even give a lecture to showcase your expertise. Keep in mind that building brand awareness in a new region will require more time and money.

3.Insufficient Knowledge of Local Laws and Regulations

A common pitfall for many companies is having insufficient knowledge of local laws and regulations, and whether these rules apply to their business. In our survey, 31 percent of managers stated that their organisation is not adequately aware of the financial regulations in other countries. Consider different tax rules or VAT rates that you may need to apply across borders. It is advisable to hire a local financial expert to guide you through these regulations.

Also, pay close attention to whether your product needs to meet different requirements abroad and if it falls into the same product category. You may need to make minor adjustments to your product or apply for certain permits before you can actually sell your product.

A well-prepared person counts for two

The success of expanding across borders depends on thorough preparation and understanding of the local market. Take the time to delve into the market, identify trends in the country, and connect with the right people who can further assist you with their local knowledge. In doing so, your investment in another country will pay off double, even in these economically uncertain times.

Want to learn more about how to best make the leap abroad? Download the cross-border manual and learn from experts who have already taken the step.

Download the Cross-border manual.

1. Crossing the Border Without Preparation

In the Dutch TV show 'Ik Vertrek' (I'm Leaving), we witness individuals completely uprooting their lives and moving abroad to start a bed and breakfast with little knowledge or preparation. They often lack proficiency in the local language, haven't bought a house yet, and contracts are signed by intermediaries. A scenario destined to fail. As a business, you undoubtedly want to avoid such situations. Thorough preparation is crucial before deciding to expand abroad.

Consider this preparation time as research time. It may reveal that this is not the right time to expand or that you have targeted the wrong country. But if all signals are green, be sure to involve a local expert to assist with the research. Do they believe that your product, in its current form, will resonate with local consumers? This is a relevant question, as 22 percent of the managers in our survey don't believe their products would sell well across borders. A local expert can help determine the necessary tweaks for the new audience.

The preparation period is also an excellent time to identify your competitors in the new market and understand your unique selling points (USPs).

2. Lack of a Local Approach

Ideally, we would like to copy and paste our business model from the UK into a new environment. While there might be aspects you can adopt, a local approach is essential. Consider translating your website and initiating social media activity in the local language.

Also, think about building brand awareness there. In the UK, it's assumed that consumers know your company name, but that may not be the case abroad. You need to work on your credibility there. Being locally present can help, such as opening a local office with employees from that country. More than half of the respondents in our survey (55%) indicated they would only expand if they could open an office in the new country.

However, you can start small by attending key events in your industry. It's an excellent opportunity to establish new contacts. You might even give a lecture to showcase your expertise. Keep in mind that building brand awareness in a new region will require more time and money.

3.Insufficient Knowledge of Local Laws and Regulations

A common pitfall for many companies is having insufficient knowledge of local laws and regulations, and whether these rules apply to their business. In our survey, 31 percent of managers stated that their organisation is not adequately aware of the financial regulations in other countries. Consider different tax rules or VAT rates that you may need to apply across borders. It is advisable to hire a local financial expert to guide you through these regulations.

Also, pay close attention to whether your product needs to meet different requirements abroad and if it falls into the same product category. You may need to make minor adjustments to your product or apply for certain permits before you can actually sell your product.

A well-prepared person counts for two

The success of expanding across borders depends on thorough preparation and understanding of the local market. Take the time to delve into the market, identify trends in the country, and connect with the right people who can further assist you with their local knowledge. In doing so, your investment in another country will pay off double, even in these economically uncertain times.

Want to learn more about how to best make the leap abroad? Download the cross-border manual and learn from experts who have already taken the step.

Download the Cross-border manual.

1. Crossing the Border Without Preparation

In the Dutch TV show 'Ik Vertrek' (I'm Leaving), we witness individuals completely uprooting their lives and moving abroad to start a bed and breakfast with little knowledge or preparation. They often lack proficiency in the local language, haven't bought a house yet, and contracts are signed by intermediaries. A scenario destined to fail. As a business, you undoubtedly want to avoid such situations. Thorough preparation is crucial before deciding to expand abroad.

Consider this preparation time as research time. It may reveal that this is not the right time to expand or that you have targeted the wrong country. But if all signals are green, be sure to involve a local expert to assist with the research. Do they believe that your product, in its current form, will resonate with local consumers? This is a relevant question, as 22 percent of the managers in our survey don't believe their products would sell well across borders. A local expert can help determine the necessary tweaks for the new audience.

The preparation period is also an excellent time to identify your competitors in the new market and understand your unique selling points (USPs).

2. Lack of a Local Approach

Ideally, we would like to copy and paste our business model from the UK into a new environment. While there might be aspects you can adopt, a local approach is essential. Consider translating your website and initiating social media activity in the local language.

Also, think about building brand awareness there. In the UK, it's assumed that consumers know your company name, but that may not be the case abroad. You need to work on your credibility there. Being locally present can help, such as opening a local office with employees from that country. More than half of the respondents in our survey (55%) indicated they would only expand if they could open an office in the new country.

However, you can start small by attending key events in your industry. It's an excellent opportunity to establish new contacts. You might even give a lecture to showcase your expertise. Keep in mind that building brand awareness in a new region will require more time and money.

3.Insufficient Knowledge of Local Laws and Regulations

A common pitfall for many companies is having insufficient knowledge of local laws and regulations, and whether these rules apply to their business. In our survey, 31 percent of managers stated that their organisation is not adequately aware of the financial regulations in other countries. Consider different tax rules or VAT rates that you may need to apply across borders. It is advisable to hire a local financial expert to guide you through these regulations.

Also, pay close attention to whether your product needs to meet different requirements abroad and if it falls into the same product category. You may need to make minor adjustments to your product or apply for certain permits before you can actually sell your product.

A well-prepared person counts for two

The success of expanding across borders depends on thorough preparation and understanding of the local market. Take the time to delve into the market, identify trends in the country, and connect with the right people who can further assist you with their local knowledge. In doing so, your investment in another country will pay off double, even in these economically uncertain times.

Want to learn more about how to best make the leap abroad? Download the cross-border manual and learn from experts who have already taken the step.

Download the Cross-border manual.

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Table of contents

MollieGrowthThe Three Major Pitfalls When Expanding Across Borders
MollieGrowthThe Three Major Pitfalls When Expanding Across Borders