Expanding your business overseas is an exciting time in any entrepreneur’s life, it is also one of the most stressful and daunting things you will ever do. Whether this is for one country or multiple, there are still hoops you need to jump through to get to your final destination. Some may be lucky enough to already have a good idea of what to do and where to start, but if you haven’t had any experience, it can feel like a minefield and it can be difficult knowing where to start. This is why we have created this article, to help you pin a point that you can work from.
Due to the process being long and complicated, you not only need a detailed business plan, but you also need to research the regions that you are looking to expand to. This includes factors such as language barriers, cultural differences, competition and much more.
There is an abundance of challenges that you as an entrepreneur are going to face when it comes to internationalising your business, so the more you do your research, the better prepared you are going to be when these challenges arise meaning greater opportunities for success. If you fail to do your research, your business could face losing a lot of money or damaging the reputation of your business which will in turn make expansion much harder the second time around.
As part of your research and preparation, there are some key factors that you need to consider before internationalising your business. Here are some of the factors to consider:
Affordability
One factor that needs to be considered before anything else is how much is it going to cost, and whether can you afford to do the expansion. When conducting business overseas, comes with a range of costs that you may not have thought of. Office space, travel expenses, shipping, manufacturing costs, customs and wages are all contributors to your costings. The range in which these things cost varies from country to country. It is also important to understand that some countries have unique costings such as customs. Customs, for example, bribery is illegal in many countries, but there are also other countries where it is perfectly legal and standard practice.
For this reason, it is important to work with locals so that they can help to translate and give you the local information and costs associated with expanding to that country. This will ensure that you have the budget for the expansion, rather than starting and only getting halfway before you realise that you can’t afford it.
Geographical Distance
Internationalising can be expensive, so if you are looking to expand to somewhere that is far away, perhaps start a little more locally. One reason for this is that there will be less of a language barrier. Cultural differences and customer preferences will also be much more similar than the opposed opposite side of the world. By expanding to a country closer to you, not only will you be able to understand the culture and customers more, but you will also be saving money from costly fulfilment etc. Another factor that you need to consider is the closer you are to your country, the better brand recognition you are going to have.
Tax and Employment Regulations
It shouldn’t be a surprise, but each country and region will have different regulations for tax and employment. For example, the UK have extremely strict regulations on the safety of its employees through the Health and Safety at Work Act 1974, whereas other countries are much laxer on the topic of employee safety. It isn’t straightforward in some countries as they have multiple agencies governing safety with their own regulations which often contradict themselves.
Avoiding these regulations can be catastrophic to your business as they can affect everything including hiring employees, filing tax returns and much more. Minimise your risk factors as much as you can before expanding, follow the regulations, and if you can’t navigate through them, ask for help from someone in that country.
Brand Recognition
If you’re looking to expand to new countries, chances are that you are already well established
And have brand recognition. When you move to a different country, this disappears. The world is becoming smaller and through globalisation, people are much more familiar with brands that are not from their home country. With how to world is these days with social media and the internet, your brand may already be established in some countries.
It is not uncommon for a brand to come to a different country, and on the first day have a huge line or a good amount of traffic to your business. That is something you need to prepare for by having a good amount of stock or enough staff to perform the service you provide. For this to really happen, you need to ensure that you are building enough hype before the move.
Marketing Techniques
Marketing techniques differ from county to country, whether it is cultural differences or language barriers, one message is not going to read the same for all regions. This is why it is essential to adjust the marketing techniques and messaging to align with other countries’ laws and expectations. Whilst language is important, it is essential to look at the deeper meanings of the messaging from various cultures as this will increase your chances of success. The saying goes in marketing, think globally, act locally. This means whilst you are marketing, it is important to understand the cultural differences. If you are struggling to meet the needs of your audiences, speaking to a marketing agency in that area will be able to help.
Choose The Correct Insurance
Having the most applicable insurance in your commercial enterprise is crucial whilst trying to run matters smoothly. Every element of your business needs to be insured in any other case you can face fines or lose a whole lot of cash if you get fined, sued or robbed. Insurance is simply well worth the investment as it could prevent a variety of cash losses down the line. Corporations need protection in any respect, and if you are expanding to international waters, that is more vital than ever. When you have in no way extended internationally before, chances are you’ll want a few professionals to assist as you will face challenges which you have in no way confronted before.
To make sure that you have the maximum relevant insurance that covers all aspects of your enterprise, it’s usually worth speaking to an insurance broker as they can help you with getting protection for every aspect of your business. For example, if you have been a freelancer, you may need professional indemnity insurance, but in case you are a commercial enterprise that deals on a credit score foundation, you’ll need credit insurance coverage.
