Growing the Top Line

CHAPTER 3Which GEOGRAPHIES AND LOCATIONS Will I Serve?

One of the highest risk variables to consider is the notion of geographic expansion.

When you think about expanding to a new physical infrastructure, you amass financial, logistical, and managerial risk. This is true whether you are thinking about opening a new venue in the next town or you are thinking about entering another country. The further the distance, the greater the risk.

Companies pursue geographic growth in a variety of ways, but they boil down mostly to organic and inorganic activity. Organic would be build. Inorganic would be buy. Build‐versus‐buy is generally accepted as a critical decision when considering growth options, and it’s particularly true when you think about the geographies you will serve.

When you pursue geographic growth, you run straight into a number of risks:

• Build cost
• Regulatory/taxation requirements
• Offset requirements
• Repatriation challenges
• Recruiting talent
• Acquisition costs (inorganic)
• Distribution ecosystem
• Customer acquisition cost

But, like most things that involve risk, there is also reward. By growing geographically you get

• Access to entirely new customer base
• Diversification of economic risk
• Potential for growth at multiple levels
• Test bed for new business models
• New ideas that can be applied to existing geos

Older, larger companies that have worked through geographic expansion have a tremendous advantage in their ongoing operations that align with these benefits.

There are ...