Businesses are clamouring to expand and it's easy to get caught up in the frenzy. But are they asking the right questions to map out a successful expansion plan?
Socrates said: "The unexamined life is not worth living." I'm sure he meant that for businesses as well.
From time to time, in business and in life, we tend to make important decisions without taking the time to do some much needed introspection.
Have you ever asked yourself why you live in the city you do, why you are part of the company you work for, why you eat what you eat? You may think the answers to those questions are obvious but this may not be the case if you take time to examine and understand why you do what you do.
When I talk to new clients looking to start their business in another country I ask them why they are looking into that specific market. Most of the time they look at me surprised, they pause and say things like, "because it is our next logical step" or "because it is a big market for our product" or, even better, "because management said so". When I follow up that question with a second "why?", for example, why is it your next logical step or why is it a big market for your product, most of the time they don't know the answer.
After doing this exercise and digging deeper into the real reasons why they have the business plan they have, they often realise that what seemed the next logical step wasn't necessarily the best approach - or that the fact that it is the biggest market for their product doesn't mean it is the right market for them to do business in. Sadly, most of the time clients (and friends) don't like to be questioned and underestimate the importance of this exercise.
Business people nowadays ask themselves how to do things: How to grow my business? How to expand to other markets? How to be successful? And the reality is, if you can understand "why" you will come to know "how".
I met with a Colombian client who has an excellent product for the Hispanic audience. He wanted to expand to the US because "it's the biggest market in the Americas and everybody is coming to do business in the US". That was his answer to the first "why"; when I asked him why he thought the US is the best market for their product he didn't have a clear answer. After doing some research he decided to start operating in Mexico, establish a strong presence and from there take advantage of economic agreements (NAFTA) to enter the US market via California.
Ask yourself why you do things - not just once but several times - and you will be amazed at how many things you weren't taking into consideration that are important when making decisions and how many new ideas and approaches you will discover. Talk to people and companies that are prepared to help you, gather as much information as possible and understand not only your business but what is called your business environment; understand how it affects your operations and take educated risks.
This article was originally published on LinkedIn. Read it here.
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