When to internationalise?

Going international sounds exiting and promising, but before you take the step into international business you should balance the potential outcome with the work and the financial capacity needed to be successful. For instance, if you are to work on closing a big deal with a customer abroad you might have to visit the customer a couple of times at least. When visiting the customer you will often need to invite them for a very good dinner. If you are going to do this a couple of times then the investment needed including flights, hotels, dinners, taxis, miscellaneous quickly turns into thousands of Euros. To close a deal of a large or of a complex nature normally requires that you work with the customer for many months before you will be able to (maybe) make the first invoice.

After the business development part, comes the account management part where you together with the customer work on improving your now common business. That also requires investments in time and in money to make sure you have a good outcome.  So before you take the first step you should consider if you have the time (= money) and the financial capacities to really commit yourself to going abroad. I would say that often would benefit from building a strong home-country sales first if the market is big enough.

Here is an example of a person which I believe is doing a good job by strengthening and consolidating its national operations first namely Mr. Teun Enklaar the owner of www.superstaff.nl, www.students4events.nl, www.tdc.nl. He is a very impressive entrepreneur. Not even 30 years old, already 3 companies and a clear idea of running a successful company. I think that the most important lesson I took away from him is that there is a right time to internationalize and that is not necessarily as soon as possible. If you are not ready financially and time wise then it can cost dearly.

Finally, going abroad can dramatically expand your potential market and sales – but make sure to do your homework and speak to as many people with international experience as you can before taking the step.

India

The other day at the opencoffee meetup in Amsterdam (highly recommendable to join if you are an entrepreneur and like to get fresh ideas and meet nice people) I met the owner of Moona Consulting Mr. Vivek Moona. He gave me a new insight into internationalization of business. His company develops various web solutions for clients in the Netherlands. The interesting thing is that his company itself is based partly in Amsterdam and partly in Mumbai, India.  In this way they can ensure good and close customer contact here in the Netherlands (in local Dutch language) and at the same time ensure high quality and competitive technical development from India. That is an interesting take on internationalisation. Of course we have heard stories of outsourcing but I think this goes a step further. Is this a Dutch company with Indian base or an Indian company with Dutch ambitions? In anyway I was happy to meet Mr. Moona at the opencoffee and I hope you will be able to join next time too.

BeatBelly

The company www.BeatBelly.com is a start-up that I admire for many reasons. A couple of years ago they set out to make product that would be super effective and at the same time fun for people wanting to strengthen their core (stomach muscles, lower back muscles in short). This, they (a physiotherapist and a commercial person) found can be done with the combination of a wooden bench (picture) and a number of specifically developed exercises.  The product at first look simple but as you know looks can deceive. It has a number of clever parts that you will notice immediately after sitting on it. Firstly the seat has a slight backwards leaning angle to it. That means you lean slightly backward and thereby increasing the tension and effect on your stomach muscles even before you do any exercise at all. Very clever. Secondly it has a curvature design meaning it can swing from side to side, making you work on your obliques as well as your abdominal muscles. These two “small”  inventions came from years of product development and tests and are deemed so innovative that there is a high likelihood that the pending patents will be approved worldwide. Now this is an important lesson for start-ups. Make sure that your years and years of product development are not taken away from you just because a financially strong corporation can commercialize the product faster than you can. Talk to patent lawyers in time and make a step by step plan for applying  – also if you do not have the funds right now.  Otherwise your time and money might have been wasted.  As soon as you become known it could be too late. I will be returning to the company BeatBelly in future postings as well.

BMKB – Borgstelling MKB-kredieten – Secured credit facilities

If your start-up or small company finds it difficult to get credit facilities for international expansion then the BMKB rule might come in handy. The BMKB  Borgstelling MKB-kredieten – Secured credit facilities rule means that the government will act as security (up to 80%) for the loan which you try to get at the bank. In other words, when you approach the bank to try to ensure a loan for your (international) business activities, then the bank will have less worries about getting their money back. Naturally it costs some money for you to get this government backed security. About 3%, which the bank will pay to the government and which you then will have to pay to the bank. However the interest rate you get at the bank might be slightly lower now that it is more secure. So, next time you go to the bank for a loan have a talk to them about this. More details can be found on “Antwoord voor bedrijven” (in Dutch).

Mimicme

Yesterday I visited one of my favorite start-up companies that I am talking to. The company is called Mimicme and is a Dutch Based service provider of virtual dressing room solutions. Many online retailers struggle with high reverse logistics costs (customers sending products back), low conversion rates (customers only looking but not buying) and limited cross sales (customers not buying accessories). Mimicme helps online retailers tackling these by offering an on-line dressing room. The consumer makes a virtual model of themselves (really easy) and then starts trying on clothing, boots and accessories. By having a virtual model of yourself it becomes easier to check what looks good, what fits well together etc. thereby making the on-line shopping experience more pleasant (=more sales) and making the purchases more likely to be kept – and not sent back by the consumer. This is an extremely interesting and international industry with many high level players, but surprisingly few outstanding competitors at this moment. A good recipe for international success.

The Essence

Today I had another good conversation about doing international business, namely “focusing your local business on international customers”. My friend David Beckett is setting up a publishing company and one of the first books to be published is a travel book about Amsterdam focusing on the essentials of Amsterdam – hence his brand is called “The Essence”. And in our conversation today we talked about how the product “the book” first of all is for an international audience (=international business) and second of all would have to be adapted according to that specific international audience, e.g. Japanese visitors (I choose not to call them tourists) would like to have different information than Chinese visitors or English visitors. To have a customer oriented product in the book world is an interesting concept – which normally is a bit of “take it or leave it”. I am full of admiration for starting up any company – but this one I am particular fond of since it might change the traditional business model.

Set up a business in Kenya

My French friend, Vanessa, who I got to know  in Holland, took another approach to international business. She and her family decided to open a business in Kenya, namely the Mara Enkipai Safari Camp. Now that is a really interesting approach and one many people could benefit from. The website, the pictures and the offer looks really intriguing – and I certainly find it a dream holiday. The website by the way is made with the support of a local Kenyan company called lamusoftware. Besides this being a dream holiday destination, I bet this company itself is a dream of theirs.