The following is a guest post:
It’s a tough time for businesses around the US – but it is also an exciting time. Amid the job losses, the scandal and the panic, there’s opportunity for the fleet of mind. And the statistics and anecdotes bear this out – more and more people are taking the plunge and setting up their own online businesses.
Indeed, one of the key benefits of setting up an internet business is the reduced overheads – no premises means less spending which, in turn, means you can offer more competitive prices to your customers. In fact, you can make a point of undercutting your more-established competitors to help gain a foothold on the market ladder.
Surveying the wide range of opportunities thrown up by improved technology, globalization and the fallout from the shifting of the world economy’s tectonic plates, it can be hard to know where to focus your energies. Given all the uncertainty, it’s worth taking the time to have a good, hard think about what your emerging markets are, and how you’re going to make the most of them. After all, if your core markets are changing, it would be good to have the security of other sources of business.
Emerging markets are traditionally considered to be geographical – people talk of the BRIC countries – Brazil, Russia, India and China. Of course, the vast majority of small businesses can’t have such a global reach, so why talk about emerging markets? Two reasons: firstly, it’s a useful way of analysing your own business; and secondly, international markets may not be as unattainable to new businesses as you’d think.
Analyzing your business
You’ll be acutely aware of the changes happening in your market. By changes, I mean, the types of customer growing in importance, the types of service/product becoming more popular among your client base, where your clients are physically located, how they tend to hear about you, the reason they choose you…the list is endless. You’ll be able to ride the ups and downs if you’re aware of these trends, and make strategic decisions on the basis of both your own observations and feedback from customers and colleagues. You need to be able to divide each of these different strands of your business up, so you can:
- back the winners (those which are contributing significant operating profit as a % of the overall operating profit)
- discover and back emergent new winners (those whose share of the operating profit is growing quickly and likely to make them a ‘winner’ in future)
- dump the losers (those which generate little or no operating profit, cost a lot in terms of money or management time.)
At Lingo24, for example, we’ve been doing a lot of work to expand our reach in foreign language markets. We wanted to spread our sales risk beyond the UK (thank goodness given the decline in the value of the pound!) and reduce our exposure to changes in currency exchange rates.
Two years ago, we set up websites in the languages of the affluent countries of northern and western Europe – Dutch, Swedish, Norwegian and Danish. There’s a lot less competition in these countries, so we thought we’d try our luck. It’s been a success – we’ve managed to win significant business.
In April, for example, only 36% of our business came from the UK, and five countries contributed at least 5% of our turnover. To me, these figures reflect a business which has a strong, diversified client base – and businesses with such a profile are likely to withstand shocks from changing circumstances within individual companies or countries.
Considering international markets
An emerging market could be a particular type of service/product to existing customers – a newly developed offering, for example, or one which, for whatever reason, was not available to your client base before. It could be a new channel through which people find you – perhaps a publication which starts covering your business.
But based on our own experience at Lingo24, I’d recommend you try to develop your own new emerging market(s) abroad. There are quite a few reasons why even new or small businesses might look to export as a way of developing a new sales channel for their businesses:
- the foreign language internet is far less competitive than the English language internet
- US companies have a positive reputation in foreign markets
- the cost of testing the market using search engines is low
It sounds good, but where to start?
The key thing is to develop your understanding of the market. If you have customers abroad, or US clients with links abroad, ask them whether they think your offering might be attractive internationally. If they do, ask them for contacts that could help you validate your ideas better and perhaps be your first international customers.
If you understand foreign languages, use your skills as if you were a customer to find out who you’d be up against in the foreign language market. If you don’t, you can use Google’s automatic translation tools to get the gist of what your competition are up to. If your instinct tells you there’s opportunity, you can use Google and Yahoo’s tools to identify the key phrases you will need to target in your foreign markets. Armed with all this information, all you’ll need is a good professional translation service to adapt your web copy, and you’re off! Bonne chance!
About the author
Christian Arno is founder of Lingo24, a global translation and localization company. With operations spanning four continents and clients in over sixty countries, they translated over thirty million words in the past twelve months. Their turnover in 2009 was in excess of $6m USD.