In recent business surveys, a whopping 69% of British companies are considering expanding their business internationally in the next 3 years. While this can be an amazing strategic move for your business, there can be many things that you will need to consider before you make the move. Many people have described that the processes when moving your business internationally can be extremely difficult and have many unexpected pitfalls.
By being aware of some of the ways you can be tripped up during this venture, you can plan around this to the best of your ability. While there can be many unexpected pitfalls in the world of business, by planning as best as you can you will be able to navigate this. Moving your business to an international market can be extremely rewarding- but keep the following in mind when you’re making your move.
1. Registering Your Business
The time it takes to register your business can vary massively depending on the country. For example, while a business in New Zealand can be approved in a mere 24 hours, businesses in India and Venezuela can take as long as a month to be fully registered. Regulations when it comes to registering a business vary widely all over the world. This means you’ll have to plan around this far in advance.
Setting your business up can also take a longer time than expected. Factors such as office space availability, technological differences and electrical infrastructure differences can make it so that setting up your business in that country takes longer than expected. This does not mean that you shouldn’t expand internationally- if there is a market there for your business, the delay may be worthwhile.
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Working with expansion professionals can help manage your expectations and make things run smoother for your business. They can help to minimize the inconveniences and help you navigate the difficulties of expanding your business into an unfamiliar market. Keeping this into consideration will help you massively when it comes to expansion.
2. Talent and Employment in Other Countries
One massive bonus to expanding internationally is that your talent pool expands by a huge margin. This can really make your business incredibly successful. However, it is important to make your employee search streamlined by setting out what exactly are the skillsets you will need in your expansion. By researching the country you are expanding into, and seeing what skills they have an abundance of, you will be able to see where you can add to your business. By starting your search with clear goals in mind, you will be able to find that country’s best talent in order to add to your business.
3. Employment Regulations
Much like a lot of cultural differences, employment regulations change between countries. You cannot ignore these differences, as they might be the difference between your business succeeding or failing. For example, if you’re expanding your business to China, employers have to make significant contributions to housing and social care for employees. If you’re expanding to France, they have strict rules on how many hours employees can work, and how many holidays they are entitled to. Another thing to consider is visas. If you’re moving existing employees to another country, you will have to consider how long it takes to get them visas, how long their visas will last for, and how many hours the employees will be able to work under the visa. By sorting all of this out ahead of time, you will save yourself quite a few headaches down the road!
4. Tax Regulations
Like employee treatment regulations, there are also different tax regulations that you must adhere to. For example, many countries have significantly higher business tax rates, or different ways in which tax is calculated. Make sure you are doing thorough research while you are making your transition. Hire an accountant or solicitor who is well versed in international business law will be able to help you with everything that you need to know. Make sure you do not neglect this portion of business expansion- you could get into significant trouble if you don’t adhere to these rules.
5. Cultural Exchange
You must carefully consider how the culture of the country in which you are considering expanding will receive your business. If the culture has no need or desire for your product or services, you will have spent a lot of money to not have the return you desire. Furthermore, there might be cultural differences in terms of advertising, marketing and business processes that if you do not update your business model might set you up for failure. Making sure you’re doing research on your chosen culture and how your business will translate will make sure you’re successful. By doing research or networking with others in the country you will be able to figure out what you need to change in order for your business to translate well in the expansion.
6. Political Stability
A key thing to consider is the political structure of the country you want to expand into. Many countries have a significant problem with getting international business because they have unstable governments. Unfortunately, an unstable government means an unstable economy, and it means that rules and regulations may change very quickly and often. Doing your research on the country can make sure you can avoid any political implications impacting your business.
7. Economic Stability
Even if the government of your chosen country is stable, there might also be economic unrest. This can make it extremely difficult to expand your business into this country. Before registering your business in a country, hiring experts might help you navigate this economic uncertainty. Having security barriers in case of an economic catastrophe may also help you before you expand into a country’s market.
8. Market Research
As aforementioned, the market changes ever so slightly between different countries. By doing market research, you will be able to know what the country you are expanding into wants from your industry. By doing this research extensively, you can find a niche for your business to fit into. Knowing what the market for your industry looks like in that country, you will know how to make your business stand out. There are two ways in which you can carry out market research- primary and secondary research. Primary research is research your business will carry out on its own through sales data and customer surveys. Secondary research is research conducted by other organisations, such as a county’s government, or independent market researchers. Doing this research will let you know where your business needs to target, and will set you up for your international transition very well.
If the country you’re expanding to speaks a different language, it might seem as simple as hitting google translate on your website to translate your business marketing for a foreign market. However, language can be quite difficult at times. Things may be lost in translation that a language converter software might not necessarily be able to translate. Employing qualified translators who are fluent in both languages will ensure that your business website, advertising and correspondence is translated correctly. This is really important for expanding your business into a new market.
Marketing strategies that might work really well at home may not work as well in the country you are expanding to. For example, in India, McDonalds have focused on marketing their vegetable based products rather than their meat products. Other companies like this have also started to incorporate versions of international foods when expanding internationally. This is a good example of how you might have to alter your business’ marketing strategies to better appeal to an international market. Consumer behaviours being impacted by cultural differences may also make a difference to your marketing strategy. For example, Japanese consumers tend to focus on reviews and product comparison websites rather than other forms of advertising when choosing which product to buy. By keeping these factors in mind, alongside your market research, you will be able to better market your business on an international scale. Make sure you know what you’re doing when it comes to international marketing, so that you can start your international business venture off on the right foot.
11. Protecting Your Business
Making the move to international business can sometimes be risky. This puts a lot of business owners off expansion. However, if you take steps to adequately protect your business, these risks can be mitigated somewhat. For example, cyber and data insurance will protect your business’ data if you are unfortunately a victim of a cyber attack. There are many business insurance brokers who offer specialized international business insurance, which is something you might want to consider in your expansion. Credit Insurance Brokers help cover you if you have clients or customers who don’t pay their debts, which could be a problem, and could be more difficult to sort out on an international level. By considering all these avenues to insure your business, you could mitigate the risks associated with expanding your business internationally.
If you keep all these things in mind when planning your business’ expansion, you could make everything go much more smoothly in your expansion process. Expanding your business internationally can be extremely beneficial for your business- don’t be put off by the risks. As long as you keep the risks in mind, and put navigating these risks at the forefront of your business plan, your expansion can go very well.
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