What To Consider Before Taking Your Business Global

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(geralt, Pixabay)

5 June 2020. When your business is doing well and you have seen a period of sustained growth, you need to start thinking about your next steps. For many businesses, that means expansion, and in some cases, you may decide that you want to expand your business overseas.

You can increase your revenue in a big way if you are able to tap into new markets overseas and turn your business into an international powerhouse. However, expanding your business overseas is a lot harder than you may realize because you need to adapt your marketing practices to appeal to a different audience, manage all of the legal issues, and get past practical hurdles, like the language barrier. Many businesses fail when they try to expand internationally because they are not prepared to face all of these challenges. But if you are able to overcome those hurdles, you stand a good chance of success. If you want to expand your business overseas, here are some important things you need to consider.

Are you ready for expansion?

Before we start looking at the specific challenges involved with overseas expansion, it’s important to consider whether you are really ready. Many business owners jump the gun and think that they’re ready to take their business global when they are not, and that’s when they run into trouble. Moving a business overseas is incredibly expensive, and it requires a lot of upfront investment before you start seeing any kind of return on that investment. It’s important that you can still keep your original business ticking over and you don’t drain all of your resources on overseas expansion, so you need to perform a financial audit of the business before you do anything else. Make sure that you can realistically afford to expand the business without affecting things back at home. If you can’t do that, you risk losing it all.

As well as the financial aspect, you need to think about the personal impact. Running a business takes a lot of work, and when you start expanding overseas, your working hours will increase. You may also be holding business calls at odd hours because of the time difference, so work is going to take over for a while. Be honest with yourself about whether you are really prepared for that and whether it will affect other priorities, like family.

Finding the right country 

Finding the right country to expand into is so important, and there are a lot of different factors at play. The first thing to consider is the strength of the economy in your chosen country because you need to find somewhere with plenty of potential customers that can afford to buy your products and services. You also need somewhere with a strong currency so your earnings still have value back at home. It’s best to look at the largest world economies and find countries that have a stable government. Political issues and international relations can have a big impact on your business, so it’s important that you find somewhere with a strong, stable economy.

As well as researching the strength of the economy, you need to do some research into things like tax rates and business laws in different countries. If you try to expand into a country that has very strict laws around business and very high business tax rates, you may run into difficulties. There are plenty of countries that are very business-friendly and will not restrict your activities too much, and these locations tend to be the best choice.

It’s important that you research the markets in your chosen country as well because there may not be any demand for your product at all. Although your product might be a hit at home, there is no guarantee that it will resonate with people overseas. Make sure that you do plenty of market research and see if there are any other similar products already being sold in the country. When you are carrying out market research, it’s important that you consider the strength of your competitors.

Even if you think that your product is better, you have to remember that you are a foreign company going up against a local one. Why would people buy from a new company that has come in from overseas when they are already loyal to a product that is made in their own country? That doesn’t mean that you shouldn’t start your business, but you need to have a clear idea of how you are going to market your product and convince people that you are superior to your competitors, who are already well established.

Navigating cultural differences 

Understanding cultural differences is so important when you are doing business internationally. The language barrier is a big challenge for many businesses that expand overseas, and it’s important that you are able to communicate well in your chosen country. Hiring bilingual members of staff is a great way to deal with the language barrier, but if that is not an option, you should consider hiring some translators instead. If you cannot afford to hire a full time translator, there are some great services that allow you to outsource it.

It’s very important that you consider the language barrier when you are designing your marketing campaigns. You cannot always translate your old marketing campaigns into a new country because your slogan may take on a whole new meaning in another country and, in some cases, you may accidentally offend the people that you are trying to market to.

You also need to understand the different business customs in your chosen country. Things are done differently in other parts of the world and there are certain business customs that you will need to adhere to. For example, in China, it is expected that you bring a gift along to every business meeting. These gifts will be refused three times before eventually being accepted, but even though they are going to be refused, it is considered rude to arrive without a gift.

In the United Arab Emirates, the left hand is considered dirty and even if you are left handed, you must use your right hand to shake hands or pass documents, otherwise you may insult people. These business customs may seem strange to you, but if you don’t follow them, you will struggle to get anywhere.

Creating the right infrastructure 

Running a business overseas is a feat of organization, and you need the right infrastructure in place. Unless you are planning to relocate, you will need to hire an expert team to handle the day to day running of the new office for you. However, you need to decide how much involvement you will have in their operations. Which decisions can be made locally without your input and which decisions need to be made centrally? How often will you video conference with them? How often do you want them to report on their progress? It’s important that you have a clear idea of exactly how the infrastructure will work.

Local infrastructure is important as well, so think about things like IT and telephone systems and data protection software. It’s important that you have all of the right communication tools in place so you can easily work with your management team, even when you are halfway around the world.

Expanding your business overseas is incredibly difficult, and there are a lot of potential issues that you have to face. But if you have considered all of these important factors, you stand a good chance of succeeding.

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