Our goal is to enable you to gain a better understanding of several things that will allow you to succeed in expanding your business into Europe and avoid the common pitfalls. With my 15 years of experience dealing with non-Europeans doing business in the European market, they often make mistakes when they enter too many countries at once. Another typical mistake is to start in a European country without going through a selection process.
Three key factors that non-European exporters need to understand and avoid committing costly mistakes when entering the European zone:
- The reason Europe is different
- A culturally sensitive approach
- Develop a focused approach
The Reason Europe is Different
If we compare the US and Europe, the US seems to be a homogeneous block, but Europe is not. Throughout Europe, there are countless countries with different cultures, economic statuses, and languages. They share a vast amount of land and are interconnected across economies, populations, and social structures.
When I take non-European businesses to Europe, I see this diversity as a source of opportunity. In a small economy, making an impact and gaining traction is easier. As a result, it will be possible to utilise the natural links between European countries and leverage them.
Our team at Exportia often looks at European customers we work with to see their footprint in other European countries. We use that information to help our customers expand into more countries. We also suggest making a warm introduction to their colleagues from other countries. Developing relationships is easy this way.
Define your business long-term in Europe
In the years I’ve been doing business in Australia, I’ve come to realise that most of our Australian customers think very short-term about our development plans for Europe. As a European, I view five years as a short-term period, whereas Australians see it as long-term. It is important to remember there are a lot of companies in Europe that have been in place for over 100 years.
The European market values stability and many Europeans will only take a business seriously after three to five years in their market. It is not uncommon for professionals in your industry to watch your business’s activities and check in periodically to determine whether you are still active. To succeed in Europe, persistence is crucial.
It is an open place for trade and newcomers
With 16.6% of the world’s imports and exports, the European Union is the world’s largest trader. We Europeans are accustomed to diversity within our own continents. We share a border with many countries whose languages and cultures differ from ours, and they are often just hundreds of kilometres away.
Five areas to watch post-Brexit
The UK has long been a landing point for non-European businesses into the Eurozone. Now, this is less the case, as several new factors are to be taken into account as the UK is no longer part of the European Union zone:
- UK employees can no longer travel and work freely within the EU zone
- Import duties are to be taken into account when trading between the UK and the EU
- Gaining European compliance in the EU does not mean you will be compliant in the UK
- A UK IP protection must be now devised separately from the EU
- The UK has now a dedicated VAT system.
A Culturally Sensitive Approach
Here are some potential cultural pitfalls you should know. Some of these may sound politically incorrect to you, but they aren’t. Just the facts. Cultural differences are indistinguishable. Fons Trompenaars’ book Riding the Waves of Culture: Understanding Diversity in Global Business is one of my favourites in understanding culture. You’ll find good general guidance in this book on the differences between the communication styles of Europeans. Our communication styles change from very direct with our Nordic and Scandinavian colleagues to a more indirect style when dealing with our Southern European, Italian, Greek, and Spanish colleagues.
Generally, it depends on the person’s personality and their experience in the country where they plan to work. As an example, I’m French, but I find it works well in Germany because I’m very organised. My sales teams and I agree on processes and follow them. Whenever I schedule a meeting with my German colleagues, clients, or distributors, I announce my agenda in advance.
That is not always the case for meetings with French clients. Meeting with the French is more flexible, and they will discuss whatever topic you want. They are flexible and willing to work with you.
Develop a Focused Approach
To get started in Europe, Exportia recommends starting with one or two countries only. The trick is to sell the first products as quickly and with as little investment as possible. To achieve that, a small to medium-sized business in Europe needs to be focused.
Because of the diversity of the European Union market, anyone entering a new country has to familiarise themselves with the local conditions. Focusing on what you want to do is the best way to proceed; you will learn more quickly, and it will also be less costly for you.
Choose your top European country
It is important to pick a country where your solution or product has the most potential. Besides market size, you need to find out if this country will buy your product shortly. When we choose top European countries, we are mitigating this risk. Our goal is to pick the countries that will be early adopters. Afterwards, you’ll be able to scale to other countries in Europe.
European countries are all unique
There are several country profiles I have created that contain useful information for small businesses looking to enter the European market. The mistake small businesses make often involves rushing into one country without carefully choosing which one to enter. Profiles of these countries highlight interesting facts, such as multinational companies that originated there, the share of SMEs in the economy, and the number of hospitals.
When entering a foreign country to expand your business, you must do proper research first. Especially for small to medium scale businesses, with limited resources, you cannot afford to commit mistakes during your expansion phase. Hopefully, these guides will open up your mind that expanding in the European market should be taken seriously.
Want to know more about how to effectively market your business in the European market? Get your FREE copy of “The 4 Steps to Generate Your First Million Euros in Sales” book here: https://www.exportia.com.au/export-business-europe/