11 Tips for expanding your business internationally
Expanding your business abroad is frequently a smart business move to increase sales, grow your global presence, and stay ahead of the competition. However, it would be a mistake to assume that it will all be plain sailing!
Here are some tips that will help you handle an international expansion with confidence.
1. Be very well informed about the market you’re expanding into
Before you make any decisions about expanding, you need to research your target market thoroughly.
- You need to know what that market’s economic status is.
- You need to know the local culture, customs, religion, spending habits and the political situation.
- You need to establish what the entry requirements are for businesses to move into the market, and what rules, regulations and laws apply to foreign businesses operating there.
In short, you have to know your new business environment thoroughly and in depth.
2. Establish whether your product or services will be viable in that market
Unless you have made very sure that there will be a market for your product and/or services, expanding can be a very expensive mistake! Researching who your local competition will be is crucial. Can you compete with existing prices in that market, and how will that impact profitability?
3. Make sure you’ve done in-depth financial planning
Before expanding abroad, you have to be sure that you have the necessary funding to see the expansion through. You have to research what the various aspects of establishing the business are going to cost.
Bear in mind that you’ll be dealing with costs you might not have encountered before.
- What will you have to pay for premises or leases?
- What are the overhead costs that will apply to setting up shop in a different country?
- How will local transport costs impact your funding?
- How do salaries there compare, and are there costly packages that apply to job termination?
4. Have you aligned yourself with the right partners?
Going it alone is much harder and riskier than slotting into a network of existing business relationships. Aligning yourself with a market-savvy local partner may save you time and money, and protect you from expensive mistakes. Having local expertise to draw on can make your expansion go more smoothly and be less stressful.
5. Learn everything applicable to local legal and tax issues
It is absolutely crucial that you and your team have reliable in-depth information about the regulatory and tax situation that pertain to your new target market. You also need to know what international trade agreements and tax laws are in force and how that will impact your expansion.
You need to know which business activities and practices are regulated, and which employment practices and customs procedures will affect how you run your business in the new market.
6. Have you chosen the best business structure for your expansion?
Choosing the right business structure is fundamental to your expansion. Therefore, deciding whether you will open a branch or a representative office, subsidiary, or a joint venture, is key – as the relevant administrative procedures will vary notably from structure to structure. This decision warrants painstaking and thorough research.
You also have to find and put in place the right insurance strategies to cover your business against political and trade risks. This also applies to your employees abroad. You need to put in place a risk management plan and insurance to safeguard expat and other employees.
7. Have you considered how you will implement customer service in your new market?
As with all businesses these days, excellent online customer support lies at the heart of a thriving and successful business. In a foreign environment, where hiring local people and training them appropriately might be difficult and expensive, outsourcing customer service is a workable and very viable alternative.
So, if you don’t have any inhouse CS reps fluent in the language of the country you’re expanding into, outsourcing your customer service is a sensible option. It will make your expansion that much easier and more successful.
8. Have you established what help is available to you?
There are many organisations and governments that encourage expansion abroad by giving assistance and advice to businesses that are interested in doing so. Make sure you approach any chambers of commerce, trade missions, consulates and embassies to find out what programmes and support structures are available to help you with your expansion.
Many countries have also established government funding programmes to encourage and support international business expansion. Make it a priority to find out if your business qualifies for such a programme.
9. Hire the very best employees to go on this journey with you
Finding the right people is always difficult, but it is even more complicated abroad. International expansion often requires changes in your HR management. You might have to hire employees abroad or have some of your own staff working abroad.
This is a point where you might consider a Volunteer for International Experience, or VIE, training option. You’ll also need to organise personnel and tasks in the most effective manner to facilitate this aspect of your expansion abroad.
10. Don’t lose sight of other procedures you might need to implement
Depending on the country you intend expanding into and the nature of your business expansion, you might very well have to complete further arrangements and functions like registering your trademark abroad, organising work permits and visas, or crucial, things like setting up a bank account in the country you’re expanding into.
11. Be prepared for unexpected challenges!
Online meetings have become the new ‘normal’ since the COVID pandemic – we are working in a virtual world. This is complicated by different time zones, so finding that digital balance that will create enough contact points for effective functioning is essential. Expect this to be an ongoing learning curve for all concerned that will require continuous adaptation and compromise.
International expansion could usher in an exciting and prosperous dawn for your business. However, you need to take good care of the points raised above if you want to walk confidently into unfamiliar territory!