The internationalization plan is a necessary process to organize several stages involved in the objective of undertaking abroad, either through exportation or by expanding the company on international soil.
If you are that person who finds himself at a “crossroads of decisions” on how to start internationalization safely , this is the right content for you.
Going international involves big investments and big steps towards the unknown, that’s why, from the beginning, we reinforce the importance of looking for relevant content and, mainly, partners that dominate the subject.
Based on all its experience with the European market, Singular Spark will cover in this article the essential steps for the elaboration of a consistent and safe internationalization plan.
What is an internationalization plan?
Internationalization plan is a document that aims to study and plan actions for a company to expand its business on international soil.
A good internationalization plan must have essential elements, such as:
- Estudo do produto
- Estudo exploratório do local escolhido (continente, país e cultura)
- Estudo de mercado (concorrência, viabilidade do produto no país, preços)
- Estudo de viabilidade legal e burocrática
- Estudo de viabilidade financeira (plano de riscos e oportunidades)
- Cronograma de ações para execução das etapas do plano
Without these elements, the internationalization process becomes more complex and difficult to measure.
What to do before starting the internationalization plan?
Based on our experiences in guidance and consultancy for companies that want to undertake abroad , we usually identify some patterns of behavior.
These patterns led us to understand what we should consider before starting an internationalization plan.
Which country to choose?
Because we have a strong influence of American culture, and for all the years that the US has excelled in terms of technology and innovation , the eyes of Brazilian businessmen naturally turn to North America as a target for their commercial expansion.
However, we have relevant points to highlight when it comes to choosing the best country .
More than just the reputation of the territory, you need to consider factors such as:
- burocracia
- leis
- segurança
- custo de vida
- mobilidade
- clima
These and many other factors must be taken into account before making a final decision.
According to our experience in the international market, Singular Spark is leading the eyes of its customers to the European territory for a series of benefits, especially logistical.
In the following section we will explore this subject further.
Why choose Europe to internationalize my company?
Despite the continent having a small size compared to the size of some countries, Europe brings together in its territory the greatest powers of entrepreneurship in the world .
Once your company is located in European territory, negotiation and logistics among other European Union countries are much more viable.
In terms of logistics, whether for product placement or even for technical assistance (services) and face-to-face business meetings, European mobility also scores high, since you can travel through different countries on the continent in a few hours.
Being on a continent with different countries, cultures, legislation and commercial realities increases your mix of opportunities and risks, which would be totally different if you concentrated your efforts in a single country.
Another important factor to consider is the appreciation of the currency, which today has great significance in the world of commercial transactions (Euro).
Within Europe, which country to choose to internationalize my company?
Being even more precise, we decided to recommend here the best country in Europe to internationalize your company .
On the internet you will find many recommendations from European countries for you to start your internationalization plan . Among them you will see:
- Estônia
- Lituânia
- Portugal
- Alemanha
- Espanha (já já você vai entender o porquê de deixarmos a Espanha por último)
The comparisons made to elect these countries take into account factors such as:
- Influência econômica
- Presença digital e expressividade tecnológica
- Custo de vida
- Segurança
- idioma
These and other factors are analyzed when choosing the best countries. However, we want to draw attention to Spain, a country that has become relevant in the scenario of internationalization of companies .
Why choose Spain to internationalize my company?
Let’s look at some of the benefits of Spain that are relevant to attracting international visibility, especially for digital companies .
- Alto investimento em inovação: A Espanha criou o Ministério de Assuntos Econômicos e Transformação Digital, com o intuito de fomentar estudos e planos de ação para impulsionamento dos negócios de tecnologia no país. Este ministério estuda os impactos da digitalização bem como inteligência artificial aplicada à melhoria de produtos e prestação de serviços.
- Investimento bilionário em tecnologia: Só em 2021, o Governo Espanhol anunciou um investimento de 4,3 milhões de euros (equivalente a 26 bilhões de reais) em tecnologia. Valor 6 vezes maior do que o investimento feito em 2020 (início do período pandêmico).
- Alto índice no DESI da União Europeia: DESI é a sigla para (Índice de Economia e Sociedade Digital). Esta métrica vem sendo explorada pela União Europeia desde 2014, medindo a performance dos países europeus em 5 quesitos, sendo eles:
1) Connectivity; 2) Human capital; 3) Use of the Internet; 4) Integration of digital technology; and 5) Digital public services.
Spain, along with 3 other countries, lead the expressiveness of this index, showing the technological potential that the country has.
When we speak of this potential, we are not referring only to the intellectual property of large companies , but to the capacity of the Spanish population to adopt and adapt to new technologies.
- Espanha abriga a cidade mais saudável do mundo: Valência é uma cidade espanhola conhecida pelo prêmio de cidade mais saudável do mundo. Além disso, pelo baixo custo de vida em relação às demais cidades da europa, Valência é um dos destinos escolhidos pelos nômades digitais.
As a technologically well-integrated city, Valencia is one of the target destinations for the internationalization of companies, especially in the technological sector, as the company hosts one of the biggest events for Startups in the world every year: the Valencia Digital Summit .
If you are more curious about the process of internationalization of companies, as well as doubts about the European market, this is the most complete content on internationalization of companies in Europe .
How to prepare an internationalization plan
Now that you have all the information you need about the benefits of the European market in relation to internationalization, let’s go to the practical part of the process, how to prepare an internationalization plan .
First of all, it is highly relevant to take responsibility for key information in this content:
Count on a specialized consulting company to carry out your official plan.
This means that this article is not intended to show you that anyone can make a plan, on the contrary, we will only give you creative insights here so that you know how to plan and also identify the best partner to conduct your internationalization process, after all, internationalizing a company is one of the biggest (or perhaps the biggest) steps your company is taking towards growth.
Let’s organize this section based on the topics that we mentioned earlier regarding the stages of the internationalization plan.
Set economic goals
Setting goals is always the first step before any investment. As for internationalization, it is no different.
One of the most used growth indicators as a reference for growth is EBIT ( Earnings Before Interest and Taxes ), which consists of measuring the company’s profits before subtracting interest and fees.
A step before the goal is the evaluation of previous years. Based on your growth history, you can get a predictable idea of your average growth.
In addition, a track record will help you assess your company’s total value to use as a benchmark against the next year.
After that, you establish growth patterns, always observing factors such as: the number of investments that the company will assume, costs, as well as inflation itself, since you will be dealing with a new currency.
product study
If you are a director, CEO, manager or partner of a company, you are certainly the person who most understands your product and how it applies to Brazilian territory, right?
However, it is not enough just to know the complexity of your product. It is necessary that your partner (internationalization consultancy) also knows you so that the other studies can start.
If you have a pain mapping, know that this is the best way for your partner to understand the details about your venture.
Pain map is a document that presents all the pains that your target audience has and that you can solve with your services or products, for example:
DOR = public mobility; expensive and uncomfortable transport
SOLUTION = Uber, a low-cost mobility application that offers user comfort.
PAIN = need to travel to buy household supplies
SOLUTION = iFood, an application that sells food through a delivery service
Have all the information about your product at hand, how it works, which technologies it integrates and, above all, what pains it solves.
Exploratory study of the chosen location (continent, country and culture)
Imagine that you have a small peanut butter industry, and you want to turn it into a franchise to internationalize the brand.
By choosing the country, you are unfortunately betting on a territory where peanut butter is not part of people’s culinary culture.
Result: no matter how well elaborated your production process is, it will not have the expressiveness you deserve for a mere cultural factor.
This indicates that the cultural exploration of the continent is crucial to know if your product “Match” with people’s daily lives.
There is nothing better than having a company already installed on the continent, capable of carrying out this cultural mapping capable of defining whether or not it is worth continuing with its plan.
Market study (competition, product viability in the country, prices)
After understanding the cultural aspects of the target country, it’s time to explore marketing issues, that is, the viability of your product in terms of competitiveness.
At this stage, the consulting company already has a “Full” understanding of the client’s product, so it becomes easier to search for the following information:
- Quais as dores que o produto resolve no país alvo?
- Quais são os concorrentes diretos? Como eles operam?
- Quais são os concorrentes indiretos? Como eles operam no país?
- Qual o valor do produto oferecido pela concorrência, ou qual a média de valor dentre os concorrentes?
- O poder aquisitivo médio do público paga o seu produto, ou ele se torna caro e inviável para venda em grande volume
- Existe um fator geográfico ou climático impeditivo para a popularização do seu produto, por exemplo, app de venda por assinatura de produtos de pesca para uma região não pesqueira ou com baixo índice de temporada de pesca.
- Questões morais relacionadas ao fator de compra, por exemplo, e-commerce de venda de produtos adultos em países com forte apelação conservadora ou religiosa.
All these points need to be studied in detail so that you can attest to the viability or not of your product in the market’s view.
Legal and bureaucratic feasibility study
The legal and bureaucratic part is one of the most decisive obstacles to preventing the opening of a company abroad.
Suppose you have an innovative system that created an algorithm for social networking sites. For this, your system will use the personal data of the people registered on the site.
If your company does not have a technology prepared to meet the requirements of GDPR – The General Data Protection Regulation (translating General Legislation and Data Protection), your company will certainly not receive approval from the current federal agencies to start its expansion.
In addition, the consultancy must base itself on its product study to find out which legal aspects could impede or, who knows, even make the process of implementing the product in the country more expensive.
Without this legal feasibility, your plan is at great risk of wasting financial resources in a country that is not ideal for its expansion.
Financial feasibility study (risk and opportunity plan)
Investment is a reflection of nothing less than money. Certainly, if a person seeks to internationalize their company, it is because they already have a prior investment to carry out the plan.
However, financial viability goes beyond just mapping working capital. It is necessary to carry out a pricing study of your product to establish sales targets as well as financial risk plans).
Without these studies, the company cannot predict the average time to rise of its business, that is, how long it takes to pay itself or to reach its profit goals.
Financial viability analyzes all the physical and virtual aspects of opening your business from a financial perspective:
Initial investments
- Quanto custam os processos burocráticos para abertura da empresa?
- Qual o custo inicial para adequar a empresa nos padrões de estabelecimento físico do país?
- Qual o custo de prospecção de talentos e treinamento de pessoas para iniciar o seu quadro de colaboradores?
- Qual o custo da infraestrutura e comunicação?
Recurring investments
- Custos fixos com a estrutura: Aluguel, água, energia, internet, impostos referente ao imóvel, etc.
- Custos variáveis: materiais de expediente, higiene, manutenção do local, impostos, salários, treinamento e capacitação de pessoas, aluguel de licenças e softwares
Investments with predictability of risk
- Quantidade de dinheiro em caixa para caso de não cumprimento das metas comerciais em um período pré-determinado (6 meses, 1 ano, 2 anos, etc)
- Quanto tempo a empresa consegue se manter no mercado em caso de não evolução do produto ou serviço no país (com base nos custos fixos e variáveis previamente pontuados).
Action schedule for executing the plan steps
Once you have everything mapped out and documented, it is now time to move on to the action plan step.
Every document with a planning character cannot die in the study phase. It is necessary to transform all intellectual property into shares.
For this, we recommend the following points:
- Estabeleça a ação
- Estabeleça o prazo para o término dessa ação.
- Se esta ação envolve subprocessos, estabeleça um prazo para cada etapa, a fim de poder acompanhar sua evolução
- Estabeleça um responsável por esta ação (Ou você, ou alguém do seu time, ou alguém da consultoria contratada).
- Estabeleça um status para que todos controlem a evolução das etapas, por exemplo: (Não iniciado, Em andamento, Em aprovação, Cancelado, Concluído, etc).
- Feedback/Observações: No seu cronograma, é necessário haver um espaço para que as pessoas envolvidas registrem detalhes importantes que exigem sua atenção.
All the above items are related to a complete and well-justified schedule so that actions do not run over or be forgotten during the internationalization process.
Based on a well-designed action schedule, you will have a forecast of how long your company’s internationalization will take.
Conclusion
Nothing is built without proper partnerships. No matter how involved you are with your product, or even with your dream of expanding, know that at a given moment you will need to rely on the expertise of people who are already in the target country and who already know the culture and aspects practices in this country.
We hope that this content has contributed to your knowledge regarding the steps of a consistent internationalization plan.
Above all, research and be aware of the cases of companies that have already gone through the same process.
You can also count on the best company for internationalization consulting in Europe .
You will certainly reap better results by carrying out the entire process consciously and safely from a reputable partner with experience in the European market.
If you have any questions about the processes we cover in this article, don’t hesitate to comment. Your opinion is very important to Singular Spark.