How the Recession Can Affect Business Expansion Plans

Author:

Mike Jones
Reading Time: 4 minutes

Episode

143

How the Recession Can Affect Business Expansion Plans

Aurelien Mottier

Co-Founder and CEO at Operatix

Mike Jones

CEO and Founder, Emerald Technology

There is no doubt that expansion is one of the primary goals of all business owners. However, there are many obstacles that need to be overcome before plans come to fruition. 


The looming recession threatens to disrupt business expansion plans further, causing doubt as to if funding will materialise and if the market is stable enough for further growth.


Preparation is key to ensuring your business not only survives a recession but thrives throughout it. Business leaders must adjust both their strategies and expectations, ensuring to consider all elements of their expansion meticulously.


This week on B2B Revenue Acceleration, our host Aurelien Mottier (Co-Founder and CEO, Operatix) sits down with Mike Jones (CEO and Founder, Emerald Technology). 


They discuss how the recession can affect business expansion plans, as well as how industry leaders can foolproof their strategies to ensure they can continue growing their businesses.



How can a recession affect international expansion plans?



It doesn’t take a financial expert to realise that business leaders must be vigilant with their money this year. The threat of a recession has long been looming, but the economic downturn seems to be more of a reality in 2023.


Expanding into new territories is expensive for any industry, but Mike believes that the recession will affect technology vendors’ international expansion plans in particular. This is because VC funding is increasingly difficult to attain in difficult market conditions. Many post-IPO vendors have seen much of their share value wiped, with a significant reduction in VC funding, more so for late-stage Pre-IPO vendors.


Because of this, vendors are increasingly concerned about cash flow and preservation, taking the focus away from their business expansion plans. However, Mike believes that this isn’t necessarily the right call. So long as sensible financial decisions are taken, and the product/market fit is right, businesses can successfully grow even throughout an economic downturn.


This is partly due to the fact that there are fewer companies hiring through an economic downturn, and so is a great opportunity for an expanding business to acquire talent. There has been fierce competition for such talent post-COVID, with resources becoming increasingly limited, but it’s certain to be the opposite should the predicted economic downturn come to fruition.



Reducing the risk


Business leaders have, understandably, become increasingly more cautious about proceeding with international expansion plans due to the unsteadiness of the market. No matter how carefully thought out their plans were, most did not take a recession into account. This has led to more companies slowing transitioning or testing new markets rather than diving headfirst into expansion.


The state of the market has left more and more business owners looking for proof of concept before proceeding with any type of territorial expansion. This could be via existing customer success, channel partners signing up and revenue pipelines.


Mike says that this plays perfectly into both the Emerald’s Employer of Record (EOR) model and the Operatix outsourcing sales model because they can seed the market and start seeing traction without committing to setting up entities in new territories.


Emerald’s EOR solution is designed to significantly reduce risk when expanding into new territories in a number of ways. This includes:


  • Ensuring all employees are legally compliant in their country of work, thus meaning that your clients avoid any issues surrounding employment law and tax compliance
  • Clients avoid setting up costly, time-consuming, and legally complicated entities in countries they typically don’t have any experience within 
  • If a new territory doesn’t go to plan, clients avoid exit fees and ongoing liabilities when closing down their business operations.
  • The solution provides ongoing support on the operational side with fillings, VAT returns, HR issues etc.
  • Remote employees can swiftly and compliantly be switched from an entity to an EOR solution whilst maintaining all relevant compliance if handled correctly.


Investing in such solutions can ensure businesses are more readily able to tackle the potential problems that can arise when expanding abroad, helping to avoid financial trouble down the line.



Preparation is key



Preparation is key to ensuring your business not only survives a recession but thrives throughout it. While admittedly easier said than done, industry leaders must attempt to foolproof their strategies to ensure they can continue growing their businesses throughout this unsteady time.


They mustn’t miss out on an international market opportunity by being overly concerned with cash burn if expansion has the potential to create multiple revenue streams. Expansion can help increase profitability and reduce reliance on fundraising – a tricky thing to acquire during an economic downturn.


Mike advises clients to examine what has been successful in their home market and track the path of their growth to help replicate this success when expanding. In line with the notion that preparation is key to success, he stresses the importance of solidifying a sales plan and strategy that can be tweaked for new markets.


When it comes to planning the ‘where and how’ part of business expansion, Mike speaks about:


  • Considering the fact that international labour laws change from country to country, which should play a role in the decision for any HQ location or international hiring strategy.
  • Previously, business leaders felt that they needed to set up entities in each jurisdiction they wanted to trade in order to access local markets however, this is no longer the case. It has been proven that a remote workforce can be very successful for tech businesses.
  • Thanks to the popularity of EOR solutions, business leaders should focus on the countries that have the best international opportunity or those that have the highest concentration of customers.


Mike believes that choosing a regional HQ is an important factor and one that should not be rushed. The decision should be based on labour and tax laws, as well as the talent pool.


However, once a desirable HQ has been found, it’s a wise decision to hire the remainder of the remote regional resources via an EOR solution. Mike states that this saves an average of around 60% of the set and ongoing costs of expanding a business internationally, all while ensuring HR, tax, payroll and employee compliance requirements are met. Not only does this save money in costs, but it also ensures that the legalities are covered – saving the business from possible financial trouble in the future.


Saving money during the recession is essential, and while you may think that this means cutting out expansion plans altogether, you simply have to be smart about your financial decisions. Investing in solutions, such as outsourcing sales with Operatix or an EOR solution with Emerald, can help ensure your business expansion gets off on the right foot.


Want to hear more tips on successfully expanding a business during the recession? Listen to the B2B Revenue Acceleration podcast now. To hear this interview and many more like it, subscribe to B2B Revenue Acceleration on Apple PodcastsSpotifyour website, or anywhere you get podcasts.






About Operatix

Operatix is a Sales Acceleration company specialized in supporting B2B Software vendors to identify new revenue streams, increase qualified sales pipeline, and accelerate channel development across Europe and North America. Operatix has a wealth of experience in working with the biggest tech players worldwide as well as a multitude of emerging software vendors.

Operatix Establishes Presence in Singapore with Team Expansion

Aoife Daly

What is Sales Outsourcing? The Ultimate Guide

Aoife Daly

Outsourcing Sales: Ten Misconceptions Debunked

Aoife Daly

Ready to get started?

Learn more about how we can get work as an extension of your Sales & Marketing teams to drive more revenue.

Channel Transformation

Digital transformation is changing how companies buy and use business solutions, making vendors re-assess the capabilities of their channel ecosystem. With channel dynamics in constant flux, vendors need to be ready to cut ties with partners that don’t share their vision or have connections with the right B2B buyers.

 

Operatix has supported numerous vendors in their path to Channel transformation by assessing current partners and recruiting new partners that are more aligned with their new channel strategy. Once the right partners have been identified, Operatix built scalable outbound sales development programs that accelerated their routes to market.

Inbound Response Management

In a competitive industry like technology every lead counts. Operatix can help you maximize conversion from MQL to SQL and from lead to pipeline, increasing both your revenue and ROI on marketing activities.

Account Identification

Identifying the accounts that are more likely to buy from you is part of our expertise. We will research the market, identify verticals and industries that can benefit from your solution and set up qualified sales engagements for your teams to kick-off the sales process. 

Cold Prospecting

Our team will identify new sales opportunities within the strategic accounts that you haven’t been successful in penetrating through your sales & marketing efforts. By applying the ‘Challenger Sale’ methodology we use a tailored, multitouch approach to connect with prospects, generating qualified sales engagements for your team and ultimately increasing your pipeline.

Outbound Sales Development

Using a proactive outbound sales approach has been proven to be one of the most effective methods to engage with prospective customers. By applying the ‘Challenger Sale’ methodology we use a tailored, human approach to getting in touch with prospects to increase your qualified sales engagements and ultimately generate more pipeline.

Outbound Sales Development

Using a proactive outbound sales approach has been proven to be one of the most effective methods to engage with prospective customers. By applying the ‘Challenger Sale’ methodology we use a tailored, human approach to getting in touch with prospects to increase your qualified sales engagements and ultimately generate more pipeline.

Partner Concierge Service

Our Partner Concierge Service helps vendors accelerate their channel programs, by engaging and nurturing channel partners and supporting them to get to revenue quicker.

Demand Generation

Whether you need to implement a demand generation strategy or get more results out of your existing demand gen engine, Operatix can work alongside your marketing team to yield better results out of your demand generation programs.

Account-based Marketing

An Account-based Marketing strategy is only as successful as the revenue it generates. At Operatix we will support your 1:1, 1:few or 1:many approach to get your team in front of decision makers in the accounts that matter the most to you. 

Lead Qualification

If your marketing leads aren’t converting, it might be a lead qualification issue. Operatix can help sieve through leads that need further qualification, so they are ready for an AE or sales team member to engage with.

Account-based Selling

At Operatix we will support your 1:1, 1:few or 1:many approach to get your team in front of decision makers in the accounts that matter the most to you. 

Pipeline Generation

Generating Pipeline for our clients is our key-objective. And we do that by using a multi-touch, multi-channel approach to generate qualified sales engagements for our customers’ sales teams.   

Account Intelligence / Deep Dive

Understanding buying centres, hierarchies and relevant personas in strategic accounts is a fundamental step to increase conversion rates. By leveraging account intelligence in a sales conversation your team can tailor their message and provide value to their prospective customer. But sales & marketing teams often struggle to dedicate time and resources to do the deep research and this is where Operatix can help.

DMID – Decision Maker Identification

Finding quality data is an on-going challenge for B2B Tech vendors. The accuracy of data platforms is questionable and that is why Operatix developed a manual process to identify & verify contact details for decision makers within strategic target accounts.

Playbook design

Operatix can develop Sales Playbooks that enable teams to sell more effectively. Your Playbook will be fundamental to get your messaging right, accurately position your solution against competitors, and adapt the communication of your value proposition to different buyer personas.

Recorded Testimonial: RXVantage

Fill in the form below and receive the recorded testimonial of Jeremy Gilman. 

Recorded Testimonial: Qualys

Fill in the form below and receive our recorded testimonial from Joerg Vollmer, the General Manager at Qualys.

Recorded Testimonial: Incorta

Fill in the form below and receive the recorded testimonial of Emily Lewis. 

Sales Playbook Development

Operatix can develop Sales Playbooks that enable teams to sell more effectively. Your Playbook will be fundamental to implementing the correct messaging, accurately position your solution against competitors, and adapting the communication of your value proposition to different buyer personas.

Lead Qualification

If your leads aren’t converting, it might be a lead qualification issue. Operatix can help filter through leads that need further qualification, ensuring that they’re ready for an AE or sales team member to engage with and progress through the funnel. 

Partner Portal / Marketing Concierge Service

Vendors often spend thousands of dollars building multifunctional Partner Portals to help channel partners educate their teams, manage opportunities, and create marketing programs. Still, these portals are often underutilized due to lack of bandwidth and capacity from vendors to offer support in enabling their partner community. Operatix, through their Partner Development team, can support your partners to make the best use out of your partner portal, managing the relationship with your partners and helping them set up co-marketing campaigns to drive more revenue for both businesses. 

Marketing & Sales Alignment

The sales development function is often seen as the “glue” that brings sales & marketing teams together. By working as an extension of your teams, Operatix will be your predictable source of pipeline, sales & revenue.

Optimization of MDF

Market Development Funds are an important component of any channel ecosystem, though vendors believe they are not maximizing the return on investment they should be getting from their MDF programs. At Operatix, we build scalable outbound sales development programs that will give you the visibility of return over the invested spend and will provide clear value for your channel partners.

Increase Partner Productivity

The 80/20 rule is still very applicable to the channel, which means that investing in partner productivity should be a priority for vendors looking to grow their businesses. Operatix can increase partner productivity and shorten sales cycles, by identifying ready to engage sales opportunities for your most valued channel partners.

Virtual Channel Account managers

Our VCAM team is responsible for building, maintaining, and managing sound relationships with current and prospective channel partners. They can get involved in opening up new sales conversations as well as closing small businesses up to $ 10k.

Tier 1 & Tier 2 Activation

Whether your business decided for a Tier 1 or Tier 2 distribution model, Operatix can help your channel partners get to revenue quicker. By providing qualified sales engagements to your channel partners we can accelerate your route to market with tangible and easily measurable results.

Solution Selling Training

Far too often vendors insist on enabling their channel partners to talk about features and technical details of their solutions. Customers don’t buy features; they buy the benefits your solution can bring. Operatix will work with your partner community to train them in articulating your message from a high-level business perspective, enabling them to talk to prospects about the value your solution can bring to their company from a board-level perspective.

Channel Enablement

Enabling your channel partners have measurable wins for your business when done right. Operatix has a proven track record in enabling channel partners from a sales & marketing perspective, providing them the knowledge and tools to successfully pitch your solution and sell the value & benefits of it. 

Partner Recruitment

Recruiting the right Channel Partners is the first step for a successful channel program. Operatix has helped over 350 B2B Software vendors recruit suitable channel partners across EMEA and North America, supporting them to scale and expand their presence in different geographies and verticals. 

Risk/Reward Business Model

To truly work as an extension of our client’s sales & marketing teams, we have also adapted our business models to show how our clients operate, and how their success is measured. With our risk/reward business model your investment is proportional to the results our team delivers.

Sales Qualified Leads

On average, 52.5% of the sales engagements set up by our team progress into a next step in the sale process. That means that 5 out of 10 meetings will progress either into a POC, a Demo or a pipeline opportunity.

Geographical Scale

Trading in different geographical markets not only requires a knowledge of the native language, local rules & policies, but a deeper understanding of the local culture and habits. We have the ability to deliver campaigns in multiple countries with flexible resource allocation. This is through our team of international speakers, who have the ability to sell in 17 different languages across the globe.

Increase Revenue & Decrease Cost

Building an internal sales development team comes with many additional costs and challenges that aren’t always taken into account: recruiting resources, training and enabling them etc. You also need to take into account the need for having the data and tools to make them successful, which in turn requires time, capital and effort. By outsourcing your sales development to Operatix you will see your revenue increasing, while decreasing costs and business risk.

Predictable Pipeline Generation

On average, our clients see a 26X ROI on the programs we deliver. By understanding your revenue targets and sales pipeline gap, we will work on a sales & marketing plan that will deliver tangible results.

Vertical Growth

Entering new industries or launching new product lines? Operatix can accelerate your growth by supporting your go-to-market strategy, and getting your sales teams in front of decision makers in key target accounts.

Reduce Headcount

By outsourcing your sales development and partner programs to Operatix; we reduce headcount and the challenges that come with managing people, technologies, and processes. We take care of your sales development, so you can focus on what matters the most: growing your business.

Revenue Acceleration

Operatix helps your business get to revenue quicker. By providing qualified sales engagements for your direct sales team (to kick-off new sales cycles), or by accelerating the growth of your channel partners, our focus remains on delivering tangible results for your business. 

Persona-based Selling

Operatix team will design specifically tailored messages to influence the different levels of decision makers in the sales process, tailoring the communication according to each job function. Our focus is to sell the value of your solution from a business perspective, not its features.    

Recorded Testimonial: Bitglass

Fill in the form below and receive our recorded testimonial from Aya Fawzy, the former director of Bitglass.