If you’re thinking about expanding your business to overseas markets then you should take on board some important tips to ensure you’re successful.
Work out how your business model will translate
There are a number of different ways that a business can expand internationally including exporting, importing, joint ventures, licensing and production off-shore. It doesn’t matter which one fits you, you will always need to make sure that your business model will translate to an overseas market before you start to close a deal abroad. You need to consider and fully understand the cultural implications of the process and determine how much you, your employees and your business strategy may need to adapt to the local market.
Spend time developing a business plan
It will be unlikely that the plan you had in place when you first started your business will have been made to operate in other places, particularly foreign countries. Sit down with your original business plan and see if you can adapt it or whether or not you need to make one that is entirely new. When creating an international business plan here’s a list of things you should consider:
- Import/export pricing strategies
- Additional costs (marketing, shipping etc)
- Potential partnership and investments
- Sales models (internet or location-based)
- Potential markets/customers
- Legal, regulatory and licensing requirements
Know the importance of target markets
No matter where you start a business, establishing and knowing the importance of your target market is one of the major factors to initially consider. Regardless of what your business is offering, you need to ensure that there is enough demand for it in the country you wish to expand to/operate in. Make a list of positive and negative factors that may impact your business in regards to the target market you’ll encounter and make adjustments accordingly.
Be legally prepared
Some countries are known for their tendency to be extremely litigious so a strong legal representative is vital to make sure that you don’t take unnecessary risks. This can also include a readiness for setting up tax and finance infrastructures at the earliest possible date as this will ensure your foreign entity is adhering to local corporate policies and procedures. Consider things such as:
- Sales and VAT taxes
- Risk management plans
- Establishing relationships with local banks
- Outsourcing accounting, payroll and tax
- Cash repatriation plans
- Developing a transfer pricing study
- How to gain cheap international calls
Don’t be afraid to ask for assistance
One of the biggest challenges that business owners face when expanding internationally is being afraid to ask for assistance. Expanding any business, whether at home or abroad, is a huge challenge and you should always seek advice from places such as Business Administration Offices or even ask other business owners who have succeeded in international expansion. Ask yourself whether or not you may need an international partner to help you with keeping costs down at home.