Getting international expansion wrong can be expensive. Here’s how to avoid the nightmares.

Whether it’s Uber in China or Deliveroo in Dubai most start-ups want to expand beyond their home market. For investors it’s a sure fire way to generate growth and mitigate competitive threats. Expanding into a new market means taking on a series of challenges. Getting these challenges wrong could see your start-up making a hasty and expensive exit.

Before you set up shop in Beijing or Nairobi there needs to be a considered approach to expansion. Let’s think of it as an expansion process with a before, a during and an after. We’ve pulled together some of the advice we give to our clients.

Before

1. Home market stability

Before you even expand beyond your home market assess how stable and robust your business is. Ask yourself if you’re in a position to expand whilst growing in your home market. Consider whether your business can withstand and deal with any sudden shocks. Be aware that expansion does bring risk, will divert resources and attention. Consider how you could manage these pressures before rolling out a map.

2. Home market ‘stickiness’

An awful term you’ll agree but an important one. If your business isn’t resonating with users it may be better to reconsider your idea. Failure to generate growth in one market shouldn’t lead founders to look for growth elsewhere. Having a sticky product will signal that adoption outside your home market is likely.

3. Market attractiveness

Do your research to determine how attractive any new market might be. Identify the size of the opportunities available. Ask yourself how many customers you could attract.

It’s worth exploring what the competitive landscape looks like. Do you have any competitors that could counter any market launch? If you are looking to consider somewhere like China or india are there others you could partner with? This is especially important in markets like India where foreign investments can get tangled in red tape.

Explore whether you could leverage any existing relationships you have in a country. You may find some outsource partners that could speed up expansion and lesson the risk.

Consider the impact of regulation and legislation. Get ahead of it and understand how easy or difficult a launch could be. You don’t want to launch only to find yourself fighting with locals and clogging up the supreme court.

4. Know your ‘red lines’

This is really part of point 3 but it’s important to single it out. Be careful not to adopt harmful beliefs or jettison your values in the chase for new markets. Many people expressed anger at Yahoo’s transgressions with data to secure Chinese growth. Identify which markets you are happy to do business with and which you aren’t. Also, don’t forget to understand laws that might prohibit expansion in certain markets. Breaking international sanctions isn’t a great start.

5. Product state

Determine whether your product is ready for a new market launch. Think about the basics from language to currencies and even customer data. Is your idea something that requires large conurbation populations full of millennials? The latter will also guide your market choice.

6. Capital costs & contingency

Market expansion is expensive. Uber has racked up gargantuan costs in China with the value of debt increasing. Speak to your investors and know your books inside out. If asking for a further tranche of investment prepare to outline a business case. Be clear on how much you need and how it will be used. This includes everything from technology to office set-up and new customer acquisition.

7. Management expertise

Ensure you have a management team that can handle expansion and home market activities. Be wary of launching overseas without adapting your management team, skill set and expertise. A great leader in the US might not be the best person to secure growth in Asia Pacific. It’s a difficult balance, but avoid creating an unwieldy management team that has too much on their plate. It’s also critical that you don’t end up with senior leaders who hate delegating. Everyone will want to conquer India but don’t let them. Pick the right team.

During

8. Localisation specialist(s)

During expansion make sure you have plenty of capable people on the ground. The biggest investment you’ll need to make is in a localisation specialist. These roles are becoming increasingly important in places such as China, India and the Philippines. You might have more than one specialist and instead have a team specialising in different areas. You’ll need local advice on cultural nuances, pricing, marketing and to help set-up new partnerships. There’s nothing more important than understanding how local media and adoption works.

Remember to be clear on roles and who does what and when. If you are launching a new office site and/or hiring new people have a concrete idea of how it will all work. Do not hire without a robust plan just because you believe you need a lot of people to make China work.

9. Pivot, Pivot, Pivot

Prepare to make changes quickly. If something isn’t working, stop it and try something else. Your expansion fund is not infinite so be harsh with activities that aren’t working.

10. Give detractors a means of ‘pressing the flesh’

Entering a new market will ruffle feathers. If your idea is disruptive enough you could find yourself dealing with protests and activist politicians. Avoid at all costs raising the drawbridge and holding a siege mentality. It might be worth getting ahead of detractors and engaging with them. Provide them with a way of meeting the brand and the people behind it. Listen to detractors and give them a chance to share their ideas — they may have some useful advice.

After

11. Lessons learned

Once launched in your new market find some time to note the lessons your team learned. You’ll need these to improve future expansion plans. Identify weaknesses and strengths. Explore what you would do better next time. Ask whether your planning was sufficient.

12. Hub & spoke

Consider formalising a scale and expansion team that can speed up the process of on-boarding new markets. Work with your management team to build a ‘hub and spoke’ model where regions can exploit economies of scale and expertise. Having a central team in say Latin America can help divert and re-organise market resources as required.

Expansion is an exciting time. Hopefully these tips will help make the process smoother.