You’ve built a solid brand and system in the United States, but you know it could be even bigger. You’ve had friends and family tell you for years how well your system would go in Australia because they just got back from vacation and noticed a gap in your sector while they were travelling.
Your instinct tells you it’s time, your intuition tells you to look before you leap. Follow your intuition!
As a franchise consultant of some 35+ years, and a dual citizen of the United States and Australia, I’ve helped franchise brands come to America, and helped American franchise systems explore opportunity beyond the borders into markets around the world. In all cases, success comes from spending the time today, to know what the business looks like tomorrow.
Build the business case before you buy the plane ticket
AI has given business leaders a real helping hand when it comes to doing early market entry research. From the comfort of your office, you can gather enough market intel to at least offer up a draft working paper that delivers that ‘hand on your heart’ moment – should I stay or should I go?
Start with the end in mind
What does your business look like when it’s finished? Is it one new market entry, multiple entries, or are you going through the process to simply talk yourself out of going global just so you can take it off the table and focus on your backyard? All great questions when assembling your 3-year plan. And that’s the only roadmap to help you answer that question. So, start with that, and work your way back to a risk profile that matches your intuition.
Cash is king, in any language
With your new plan in hand, set about building an overlay of a Variable Sensitivity Analysis to validate your initial financial findings. Think of this as a ‘good, better, best’ guide to accommodate the good days and the bad, and there will be both. The caveat being that a bad day, from a distance, is exponentially harder than it is two doors down. As with many businesses, there will be a moment when you’ll need to rob Peter to pay Paul, but this comes with an added toll of an exchange rate, and indifferent bankers.
Look for the hidden competition
Just because your American competitors are not in the new market you are exploring, it does not mean there are not hidden challengers lurking in the shadows. Some of the stronger brands in smaller markets are the boutique operators. They may be smaller, but they punch above their weight. Know who is in the fight, before you pull the gloves on.
Do you speak the language
You say tomato, I say tomahto - is a thing. In 2008 I spent my first 6 months living in the USA struggling to simply order a ham, cheese and tomato sandwich. Only when I changed my ways did I get my lunch. Nuances matter, even in English speaking countries. Choose assimilation over brand arrogance, if you don’t want to alienate your audience. The changes may seem subtle, but the impact could be the difference between feast and famine.
If you build it, will they come
You have brand presence, size, momentum and a system that supports the American lifestyle. This means little to anyone on the other side of the border. Is your system and brand flexible enough to accommodate a different lifestyle, a different way of life, a different brand positioning, and even a different offer? Your market entry strategy needs to make culture a consciousness, not just a consideration.
Seek to partner, not pillage
The days of charging exorbitant initial master franchise fees in markets are long gone. So too are the days of believing you can launch a brand in a new country without a passport. Get up close with your new country partners, listen to them, learn from them, and build a better system together for the greater good of the global brand. This includes the integration of commercial intelligence across countries, understanding that interpretation is the enemy of collaboration.
Enterprise Value, or Ego and Vanity
Which ‘EV’ are you serving with your global ambitions? This is the look-in-the-mirror question that only a strategically solid and subjective 3-year plan can answer. Will this market entry improve your overall enterprise value for your business, or is it just to feed your ego so you can say you conquered another country? This is the feet-to-the-fire final frontier. Does the move fuel the value to your business, or just feed your personal vanity?
It’s easy to get ahead of yourself as you and your leadership whiteboard what’s next. It’s also typical human nature. I can’t begin to tell you how many boardrooms I have sat in and watched the excitement in the room go from ‘what if’ to world domination, before the first coffee break.
My message to each and every one of the founders and CEOs I have worked with is the same – If you want to go further faster, slow down to speed up. Spend the time to be strategically sound today, to take the gamble out of going global tomorrow.
Troy Hazard has been a leader in the franchise sector for 35 years. He’s worked with 300+ brands in 16 countries, and has been both a franchisee and a franchisor. He currently serves as a board advisor for several brands developing their global strategy. He is also a speaker and the author of the Amazon bestselling business book, Future-Proofing Your Business. www.troyhazard.com