Internationalization used to be a big word when growing up and is often associated with large multinational corporations like IKEA, H&M and Shell. But then the internet came along, redefined how we do business and enabled anyone with a great product to sell it globally.
There’s no need to set up a fancy office abroad or actually be present in the countries you’re selling to. Depending on your product, it’s enough if you have an attractive website that converts online users into paying customers. All of which can be done with €100-€200 for you to get started.
(For getting started with a business on a small budget we highly recommend you to check out The $100 Startup)
A couple of weeks ago, we launched a new feature which allows PAYMILL merchants to charge their customers in their preferred local currency. One of the reason we decided to add the feature was because we wanted to help businesses to internationalize and become successful on a global scale. But why do companies go international? Let’s take a look at the five main reasons for internationalization.
Five Reasons Why Companies Go International
The first-mover advantage is basically getting into a market and gaining all the benefits of being first. For instance, you’ll able to quickly gain traction in a new market by being first. Another benefit is you’ll get early adopters on board easier since there’s no one else competing for their attention.
Potential For Growth
Probably the most common reason on the list for going global. And it’s the potential for growth. The safe course is always to start locally and grow from the foundation you’ve established at home.
However what typically happens, is that you’ve grown and increased sales in consecutive years and then suddenly your sales fall flat. This is the infamous glass ceiling at work, where by there aren’t any people to sell to. In which case, this is your sign to go and start conquering the world.
Small Home Market
Finland for example is a small country with a population of approximately 5.5 million. And while it has experienced great success with games like Clash of Clans and Angry Birds – it’s success has been down to their global reach. Similarly most of the start-ups in the Nordics are looking for global expansion from the very beginning.
Likewise, a small home market usually means customers are short supply. Which in turn affects a company’s potential for growth. Simple math here really: Bigger market = more customers.
Discourage Local Competitors
Part of the reason why these European start-ups exists is because the US companies had not ventured into Europe yet. Paving the way for others to take the lead.
By getting into a new market, you’re discouraging others from getting into the same space as you are.
With benefits like more customers, growth potential and a large market on offer it’s easy to see why operating globally is a massive attraction for companies. However one thing you need to pay attention to is government legislation concerning private transactions of foreign currencies.
This is where having a multi-currency merchant account helps to attract more customers in your target market because it allows them to pay in their preferred local currency. To find out more about accepting multiple currencies, check our website at paymill.com.