By Scott Dahlgren

In today’s economy companies often cutback and retrench in order to weather the storm. However this is actually a great time to make smart strategic investments that strengthen your current operations and propel you forward when the economy recovers. Investing in international partners is one smart way to expand outside your current base. Here’ how.

Partnering internationally is a great way to extend your sales reach and delivery capability and tap into new markets that are difficult to reach on your own. And you can generally accomplish those goals with a relatively minimal investment.

International markets also help spread the risk and even out the economic cycles that vary greatly around the world. Plus, finding small partners now means you won’t be competing as heavily for partners when they’re at a premium in a good economy.

Generally for small software companies who need to expand globally but don’t have the capital to open offices and hire people, an Indirect sales strategy, using resellers, OEM partners, systems integrators, etc., is a good approach and can help to identify and close business much more quickly. Relying on an experienced and established partner with local insight and knowledge allows you to tap into the local market faster and easier to get in front of customers and the outcome is almost always fewer mistakes, faster results, and a smaller upfront investment.

Getting Started

So how can you ensure success when expanding internationally through channel partners? Here are two items that often get overlooked in the rush to go international:

1. Have a plan: Usually software companies who have international partners didn’t start with a plan to “go international.”  More than likely they got there because of an opportunity to close some business or establish a strategic customer and suddenly they found themselves supporting and managing an international business. While that is ok, if you don’t have a strategy and plan that backs up your efforts and looks beyond this opportunity, you will likely be disappointed with the long term results.

It is certainly ok to let opportunity drive your direction and the markets you pursue, but make sure you have a plan that will maintain the momentum and ensure success after that first deal.

Consider the following:

Senior management needs to be committed and prepared to invest in the execution of that plan and realistic expectations need to be set.   International partners take 12 to 18 months to mature and require a focused effort that develops technical and sales competency, builds a pipeline of good opportunities, and establishes a model for technical support and service delivery.  Having a plan will reduce your risk and help you get the most out of the investment you are making.

1. Choose the Right Markets

If your market has traditionally been in the US, the tendency is to expand into other English speaking countries or large established markets like the UK, Germany and Japan. While this may make sense from an investment standpoint, it may not be the right approach or provide the results you want because those countries may have similar economic cycles or may be overly crowded. Harald Horgan, CEO for The York Group, recommends some other, less obvious markets to consider:

Other smaller English-speaking countries like South Africa, Australia, and New Zealand or the Netherlands and the Nordic markets where English is widely used are all good markets that are less crowded and very open to the latest technology. (In particular, check out managed services trends in Australia as covered by our sister site, MSPmentor.net.)

For those who may already have international partner but feel that they could be contributing more to the business, maybe now is the time for a tune-up to assess the situation, build a plan, and start implementing changes. International expansion during this current economic crisis may be counter intuitive but it may be the best investment to make right now.

Contributing blogger Scott Dahlgren is an independent consultant helping small and mid-size technology companies extract greater value from their partner and channel relationships. And he also runs marathons through the woods of Connecticut. Here are all of Scott’s blog entries. The VAR Guy is updated multiple times daily. Don’t miss a single post. Subscribe to his newsletter, RSS feed, Twitter feed and Resource Center.