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Overseas may seem like the perfect destination for your business, but remember, the grass is always greener...
In 2005, your firm's closest competitor expanded into the U.K. and is already reporting fledgling success. Now your company must make the same move as soon as possible, because obviously, your competitor knows something you don't, and your company is missing out. Right?
In three words, no, no, and no. Listen to Blair Neville, now with Meridian Leasing Corp. and formerly with Maple Tree Finance: "You're making a general assumption that it would make sense to move into a foreign country, but is there really a market there? Is it large enough to support [another] leasing or financial services firm? Can you take your business model into this country, or do the laws prohibit it? People say they have to expand into Europe, for example, and I ask why. Many times, they don't really have an answer."
At first glance, the thought of entering a foreign market may seem terrific, and the choice straightforward. But as Neville points out, "When you sit down and really look at it, you start going off on a lot of tangents." Before you begin planning a way to get there, be sure you know who you are, what you're selling, and what you want to achieve.
Who Are You?
Are you a major corporation, trying to export your brand? If so, Neville suggests you'd probably be wise to purchase existing local companies, rename them, and import your own people to run operations for the first 18 months to two years before bringing on local management.
If you're a captive, you're likely following your parent company and have as a goal moving equipment and making lease dollars. Consequently, your decision on where to go may be straightforward and the steps for getting there already partially in place.
If you're an independent, your main interest may be simply to make money. In this case, Neville believes your best move may be to partner with existing local companies and banks in the nation you target. Maple Tree Finance entered Australia by partnering with a fairmarket-value lessor who was looking to expand his business. By financing equipment, providing financing to other firms, and buying...