Your business is growing, and you’re looking to expand.
Taking your business global can be very lucrative. Access to new markets and revenue streams while expanding your footprint is an attractive draw for a successful business. But new markets come with new challenges, and there are important considerations to take into account when building your plan to go global.
International expansion can give you access to a wide array of potential clients and break past over-saturated markets. You will need to adapt to the local culture and business trends, then find a balance between the aims you want to achieve and the means of accomplishing them.
Here are the top five questions that you should ask when looking to take your business abroad:
1. Are you ready to go global?
Have a strong grasp on your business at home to look forward to what’s next
Expanding beyond the borders of your home country can provide a breadth of new opportunities for your business, but the decision is not one that should be taken lightly. If your business is struggling, taking it to the international stage may only amplify the problems at hand.
New markets come with new challenges. A concrete backdrop will give you the security and time to make your move abroad a success.
International expansion can increase profitability and enhance your company’s prestige. Having a presence in multiple markets can also help level seasonal fluctuations in business activity.
Your business is successful and you’re ready to plan the next course of action.
Be the man – or woman – with a plan
While it’s impossible to account for the endless number of unknowns you may encounter, set your strategy.
Your expansion needs a plan of action. Think of it like a road map. Undoubtedly, you are going to stumble along the way, but a road map will put you back on the straight and narrow. Do your research, don’t rush in to it.
Expanding your business means more opportunity, but challenges get amplified when businesses take the plunge into a new market. New business laws and taxes, a new language and culture to get acquainted with – the list goes on.
Don’t underestimate the time and resources needed to take your business to the next level. Make time to invest in your growth plan.
2. Find your where
While this may seem obvious – the where is one of the first places to start planning your move.
Work work work work work
Consider your labor pool. Will you hire staff in-country or move some of your team abroad? Do you need a local office?
Contractors can be a great asset in the fledgling stages of expansion, but having a domestic presence can also be equally important.
A local branch office creates an actual physical presence in-country. It also means direct access to your audience. Proximity to your clients and local business connections can be a valuable differentiator. Ask yourself if you can leverage a new office to accelerate growth.
Are you buying what I’m selling?
Know your market. Where is your product or service viable? There are two ways to measure this.
One is existing demand. Ask yourself if similar services or products are selling well. If so, is there room for competition, and can you compete?
The second is exploring new demand. Being first to market will give your business a competitive edge, but this also comes with a new set of challenges. Research will be your biggest ally here.
3. Consider the culture
Culture and language are key considerations in planning your expansion.
Products that do well in one country don’t always perform as well in others. Cultural norms drive different sets of priorities and preferences.
Take Walmart’s expansion into Japan as an example. Walmart brought their low-price, big-box retail model to the island nation back in 2002. However, their model did not resonate with local customers. Japanese culture places a high value on quality over cost. Limited living space in the capital city of Tokyo pushes consumers towards buying in small quantities rather than bulk.
Walmart struggled for years to adapt when much of the pain could have been alleviated by a little more cultural sensitivity.
Your approach to customers is equally as important as your approach in business on the whole.
Flexibility is crucial. Acclimating to cultural mainstays will show respect when conducting business. It will also ensure that your internal procedures are nimble and effective.
As a global company, we know firsthand how big a role this can play. Culture can impact the effectiveness of everything from strategy to management structures. Solicit feedback from in-country teams. That isn’t to say that you need to abandon your brand to mirror your environment. Adapt it and make it your own in that environment.
Be willing to adjust how you operate to maximize success.
4. The gory details
Regulatory and legal considerations are key in operating internationally. The landscape is complex, and as they say – knowledge is power. Failure to comply with these parameters can be costly. Find out the rules and regulations for your industry.
Seriously. The legal climate of your target market may be very different from what you are used to, and a local lawyer will be able to help you navigate.
Understanding the impact of local restrictions, tax laws, customs laws, corporate laws, and liability will be decisive factors in your expansion.
Protect your intellectual property
If your product is protected by a patent, you will want to consider filing in the country you are doing business in ahead of operating there.
Filing laws vary by country and can be complex. Hiring a firm or specialist to localize your patent and translate it over will mitigate the risk of errors which can delay the time it takes to grant the patent.
Some countries are more stringent than others at enforcing IP protections. Be aware of how this is handled in the country you plan to expand to.
Understand the impact on staffing
HR regulations vary by country and can be extraordinarily complex. The implications of hiring contractors or direct employees can vary based on the number of hours the employee works and your legal status within that country.
“At-will” employment is rarely found outside the US. Many nations employ more stringent employee protections, requiring detailed contracts, set notice periods for termination, and severance terms based on length of service.
The budget is a crucial element of your expansion plan.
Leave a little wiggle room
While we would all love to have costs line up perfectly with our budgets, life happens.
Surprise costs can pop up at a moment’s notice, and this is no less true when you’re operating overseas. In fact, it can be even more impactful.
Flexibility will be your friend to make sure you can keep your business plan in the fast lane and drive towards profitability. Plan out how a 25, 50, and even 100 percent increase from budget would impact your finances. The last thing you want to be is insolvent if unexpected costs come knocking.
Going global means you’re dealing with a new market and more likely than not, a new currency.
The natural choice when you’re dealing with currency is to work with your bank because after all, you use them for everything when it comes to your business, and why would this be different? Sending and receiving money via your bank can be costly and time-consuming, but there is an alternative. A third party international payment specialist will be able to offer you an alternative so that you could avoid incurring these costs. They give you access to great exchange rates, dedicated customer service and provide you with the tools to navigate exchange rate fluctuations.
As one of the leading international payments specialists in the industry, World First can help you when it comes to dealing with cross border payments. We can provide you with insights and products to handle your exchange rate exposure enabling you to save time and money. All without disrupting your banking relationship. You can read more about why you should have a plan for your currency exposure on our blog here.
World First offers a targeted solution for sending and receiving funds from abroad. As foreign exchange specialists, we offer competitive exchange rates and customer service tailored to your needs. This saves you time and money without disrupting your banking relationship.
Food for thought.
While we’re sure these are many more, the five items we’ve covered will get you on the right track to start evaluating whether you are ready to go global and start building a plan to make it happen!
Looking for more resources for your online business? Check out our Facebook group. Join our community of online sellers where you can share tips, keep up with eCommerce trends and help your business do more.