Introduction
Australia is a popular destination for companies taking their first step into another country. US companies taking the first step will often look to a familiar environment and land on comparing Canada, UK and Australia. Australia should be strongly considered as it provides an access point to the large and growing Asia economies. Australia is an advanced economy that shares many economic commonalities to the US. Company operators looking to expand to Australia should establish a global expansion playbook in order to ensure a successful execution and growth.
Research & Budget
The beginning phase of any global expansion should be to first ask the question of why you are choosing a particular country over another. This can be accomplished through a combination of reviewing macroeconomic factors, target customer base, regulatory analysis, cost of expansion and go to market strategy. Once the reason has been established, a company should then turn to researching technical steps, including company incorporation requirements, tax regimes, and government agencies. For example, in Australia a local Director is required, the payroll tax varies per state and all companies must register their employees in Superannuation accounts. Once initial research has been completed the finance team will create a budget, including items such as revenue targets, human resource costs, professional vendor fees, office space and marketing.
Legal Operations
The Australian legal industry is advanced with professionals accustomed to supporting overseas clients. This includes policies such as 1 AUD paid up capital and 100% foreign ownership. US companies should however note that the employment law landscape is much closer to Europe with high employee protections and regulatory complexity. If companies choose to setup a local entity instead of leveraging an International Employer of Record (EOR) solution then the corporate establishment process will need to take place before a local team is formed and sales can begin.
Go To Market
When creating a go to market global expansion strategy companies first determine if they will use a single country, regional or global from day 1 approach. Companies who choose Australia as a global expansion destination often use an Australia office as a single country landing pad to gain learnings on how to manage a global expansion before then launching a regional APAC strategy. By choosing one country or region to funnel resources to, you are forgoing the opportunity to gain learnings from other potentially high growth markets. Startups, Scale-Ups and even enterprise companies can benefit from leveraging lean principles for planning a go to market strategy. By launching a minimum viable product (MVP), often in the form of the product/service in the original home market, the local team can begin to gain insights from the reception of local prospective customers.
Hire A Team
Australia has a strong talent pool and education system with experience interacting within global companies. In order to ramp up sales and operations, hiring a team with as many local nationals as feasible is recommended. Companies planning their Australia global expansion playbook will usually map out the first 10 hires during the budget phase. Common mistakes that globally expanding companies make include not sufficiently planning for employer social contribution levels, termination protections, intellectual property protection and common vs mandatory benefit programs. These can be mitigated through a combination of research and working with local partners.
Build, Measure, Learn
Once a team has been hired and the go to market strategy is established, company leaders should begin the lean cycle of Build, Measure, Learn. A common mistake made when expanding globally is not treating the local operation as a new startup within the company. This requires re-establishing product-market fit through MVP launches, data gathering and iterations. Companies expanding to Australia often do find a higher degree of familiarity in terms of consumer behavior or corporate product needs. While minimal product/service adaptation can be true, companies should not underestimate the need to understand the local market needs. Firms like Adobe have made mistakes on items such as pricing that have led to brand equity being damaged in Australia. By building a global expansion playbook that is tailored to Australia, companies can gain commercial growth.
