I launched Danz in 2006 to serve the UK market. Right from the beginning, growth was strong, particularly during the summer months. Pretty soon Danz was the market leader in the UK. I believed our low-cost model would work well in other markets, so I decided to take the plunge.
My aim had always been to make hot tubs available to as many consumers as possible, not just the rich and famous. I believed this would be a view which would appeal regardless of country. I decided to start selling to the French as it was one of the easiest markets to distribute to, reducing costs and helping to maintain our affordable approach. Also, due to their warmer climate I believed demand for the tubs would be less seasonal than in Britain.
Initial sales in the French market were steady but not amazing. France accounted for 15% of our total orders and this was at very little additional effort in terms of the day-to-day running of the company.
It was a great feeling to be selling both at home and abroad and I expected to be able to maintain and then eventually increase sales in France.
Earlier this year I took the decision to withdraw from the French market after a slowdown in sales.
Servicing the market was becoming increasingly difficult and whilst we had experienced some initial success increasing sales required making many changes to the firm. We had to build France specific systems including new networks of engineers, delivery contracts and relationships with tradesmen, all of which took a lot of time and effort.
Over time these changes ate away at our margins and we ended up barely covering our French overheads. The fact we weren't losing money meant it was still a useful sales channel for the business in some respects, however the time and stress it took to keep things on track in France just simply wasn't worth it.
Our French speaking member of staff simply wasn't trained to deal with these elements of the business and this put additional strain on the rest of the team as we all chipped in to try and sort out issues as soon as possible.
Stress is something you have to learn to deal with in business but when the things that are causing you problems aren't bringing in any profit it's very easy to start thinking, 'What's the point?'
After serving the French market for over two years I took the decision to withdraw to focus all our efforts on attracting British customers.
I don't view our withdrawal from the French market as a failure at all. We entered the market, made additional sales and for a period grew our business, but as a long-term venture it just wasn't to be.
Business is all about learning to adapt and our experience of the French market has taught me many lessons which will help the business should we decide to enter another foreign market in the future.
Firstly, and this sounds so simple - try and employ someone who speaks the native language. A communication barrier just makes difficult situations even tougher and places added strain on the business as you're not always able to progress things as quickly as you'd wish.
Secondly, if you are to enter a foreign market and need additional staff to do so, take the time to get the right people in. Looking back we were so busy it's fair to say we might've rushed the decision a little, which wasn't to the long-term benefit of the company. When entering a new market it's essential to do your research and part of that involves assessing what impact the decision will have upon staffing requirements.
Don't panic if things don't start as well as expected. It can take time for new firms and products to settle in to a new marketplace so if you're able to get a foothold then be happy with that initially and try to build steadily from there.
Finally - and possibly most obviously - ask yourself, 'Will serving a new market really be of benefit to the business and if so do we need to do it right now?' It sounds so obvious but I think most entrepreneurs would agree that it is easier to service your domestic market than a foreign market - you know it inside out, it's easy to meet people and you speak the language.
If you think there is real benefit to be had from foreign expansion then do your research and go for it. But always have a back-up plan so that you can withdraw and continue the business domestically, without major long-term damage.
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