If you run a successful business, it’s quite natural that you’d want to expand. But what happens if you’ve already reached your capacity to grow your business within your own country? The answer must be international expansion.
Studies show that 58% of businesses already have international customers, so heading over to meet the people you’re selling to on their own turf makes a lot of sense.
While business growth overseas may sound like the logical next step, setting up shop in a foreign country can be quite daunting. So, what exactly do you need to consider?
Let’s take a look at everything you need to know if you want your business to expand internationally.
Understanding the Lay of the Land
The first thing to consider about opening overseas is that you’ll need to understand the geography. Which towns and cities should you target to base your operations, and where in the country are your customers?
Some areas will be more expensive to set up your business. The cost of living in certain cities can mean that wage bills naturally increase. Do you need to be at the beating heart of the capital city, or can you situate your base of operations elsewhere?
The more you know about the different cities and towns in your new frontier, the better situated you’ll be to find the right location.
Understanding the Law of the Land
Every country has its own laws, and as a business operating within that jurisdiction, you’ll need to adhere to these rules. They may well be quite different from the laws you’re used to in your home country.
Find out everything you need to know about operating legally in any country you plan to expand into. It’s definitely worth setting yourself up with a local business lawyer who can provide you with proper counsel.
You’ll need to know about any specific regulations that affect your industry, apply for any licenses you’ll need to operate, and learn all about the local tax systems.
Falling foul of local laws could be the death knell for your business.
Send Out One of Your Best Team Members
Running a business overseas can come with its challenges, one of the biggest you may face is getting your new team to tow the company line. Often, as businesses start to expand globally, certain arms of the company may act in a completely different manner to the rest.
It’s important for your growing business that your new division stays on brand. Sending out one of your most trusted team members to take the helm will ensure you retain control of your new asset.
Hire a Local Manager
To work alongside your own team member, you’ll need a local manager who is experienced within the industry, and most importantly has considerable knowledge of the country, its customs, and the people that live there.
Hiring a local manager or director will ensure you really become a part of the local business world.
Watch Out for the Language Barrier
If you’re expanding into new terrain, one possible hurdle is the language barrier. Your new team on the ground and your customers may well speak a language you’re not versed in.
While it may be helpful for you to learn the language yourself, a more pragmatic approach would be to hire translators to ensure any of the material you’re sending over from your central base doesn’t get lost in translation.
Hire a Local Team
You’ll need a local workforce in your new country. One option would be to work with a recruiter that offers global PEO services. PEO stands for Professional Employer Organization, and using a company that offers this service will ensure you’re following local labor laws.
Working with companies like this is a cost-effective way of staffing your overseas enterprise, without any of the stress that comes with finding the right employees.
Decide How Your Business Will Be Set Up
If you simply opt to open a foreign branch of your business, taxation will often be more straightforward. If you’re planning to open a foreign subsidiary, however, will mean you’ll have more complex tax issues to contend with.
Setting up your new overseas business as a subsidiary will protect the parent company from any liability while affording a range of other financial benefits. Along with this comes a greater need to understand local tax laws and reporting and filing requirements. Also, you as a business owner you can think about establish your presence in the country without an Entity through Employer of Record Services.
Find Local Partners
Very few businesses operate in complete isolation without using the services of another. You will almost certainly need to develop local partnerships to help you manage your supply chain, distribution, marketing, or even your site maintenance.
All of the services that your business uses back home will need to be found overseas. It may be worth consulting with the government embassies of the country you’re opening in or any local trade commissions for recommendations of potential partners.
Make Use of Government Resources
Most countries welcome overseas investment and governments are often keen to entice CEOs of multinational companies to open up shop on their soil. With this in mind, it may be worth finding out about any initiatives that may be in place to support companies like yours.
Are You Ready for International Expansion?
If your eyes are open to the barriers you may cross as you expand your business, then you’ll be able to navigate your new surroundings with greater ease. International expansion could ruin your company if it is not managed correctly, so it is always essential to proceed with caution.
Looking for more ways to expand your company? Check out the business section of the blog for more.
