man hands write register paper
After running a successful business locally, the next step most business owners will take is expanding internationally. The international environment can offer an entirely new market that your brand can serve and bring significant growth to your business. Nonetheless, taking this risk comes with its benefits and challenges, and you need to be prepared to succeed. You need to know that international operations might be completely different from local operations, and only proper planning and leadership can lead to success. Several things you need to do are find an existing international team to partner with, research the nation’s culture and language, and know your product or service value in the international country you plan to enter. Before expanding your company internationally, here is what you need to understand.
Conduct Market Research
Before setting up a business in a foreign country, you need to understand the unique landscape of the market you plan to enter. While you may think that this is an obvious and easy step, it requires an in-depth study to get a complete picture of the market. What many successful business owners fail to understand is that their domestic market is intuitive. When you are expanding to a new market, you must be open-minded and think of things that might never even be possible in your local market.
Conduct extensive research about different international markets and know which one is favorable for your business. Understand the taxation, incorporation, and foreign investment policies to know whether they align with your plans. Understand the new environment, its infrastructure, and its people to determine whether they support your mission. Research will help you identify a country that supports international investors and determine whether your products and services can sell well. For example, a company setup in Malaysia is easy and quick due to its accommodation and appreciation for foreign investors. While there are other nations that are business-friendly, investing in Malaysia may be your best option due to low incorporation taxes, political and economic stability, developed infrastructure, and cultural diversity, among others.
Financial Considerations
When you are entering into a new market in a new country, you must know that there will be financial implications. As a business person, you know that an international expansion plan includes a financial outlook. You should also explore all the funding models available in the global market to choose the one that fits your business. Many nations support innovative businesses in relocating by offering visa programs and tax breaks, something you should take advantage of.
You should also consider the stability of your local currency because any fluctuations can significantly influence your plan. Understand the overall economic picture of the country you plan to enter and how it can impact your business. For instance, the level of customer spending may be high or low depending on the cost of living. You can mitigate the risk by setting up local bank accounts or hedging your foreign currency exposure.
Build an International Team
After setting up your eyes on the country you want to enter, establish an international operations oversight team to oversee international activities. When expanding internationally, one of the significant aspects is to access talent in the new country and determine how it will impact your ability to operate effectively. The oversight team, which includes HR, finance, tax, and risk management, is essential in making sure the business runs smoothly. Some companies would also not hire third-party international expansion providers like Boardroom to obtain ongoing information and quality advice.
The international team helps vet any proposed expansion plan to understand the nature of activities and how they align with the corporate strategy. It studies the country’s culture and its relation to organizational culture and compliance obligations. It is also the duty of the team to undertake regular review on existing international activities that can affect the corporate strategies, compliance and budgets.
Consider Cultural Differences
While considering all other factors, including finances and stability, don’t forget how culture can have a huge impact on a business’s success. You need to know the type of product or service you are introducing to the new market and whether it will succeed. Cultural differences are not all about language; they are much more. You might be required to change every aspect of your company, including product outlook, services, and how you operate, in order to feel like an insider rather than an intruder. Locals need to associate with your company, and in order to do that, you must align with their culture and unique needs.
Understand the Product Value to International Countries
Expanding internationally is too much of a risk to just ride in a new market without knowing how the product you are bringing is valuable. International is an unspecific term that needs to be broken down to bring meaning. When talking about international, you must specify the regions, countries, and communities you are targeting. This helps you to know how to align your services or products with cultural connections. It must feel unique as per the needs of a specific locale. An in-depth understanding of the value of the product you are taking internationally can help you develop a growth strategy.
Logistic and Operational Efficiency
You must adapt your supply chain and distribution network to align with the new market and to achieve operational efficiency. Consider factors like import and export regulations, physical distance between the target market and the production facility, and transport and logistics infrastructure. All these factors have a significant impact on your shipping costs and other operational expenses. Try to develop a localized marketing strategy if you want to reach your target market. You will be required to go beyond translating the existing marketing materials and consider the communication and cultural distinctions of the target nation.
In conclusion, expanding your business internationally is a serious decision that requires proper planning and knowledge. You are going to deal with completely different people who probably have no single similarity to local people. Do extensive research to determine which market is fit for your products and services. Build an international team that will help explore different aspects of the new market. Consider factors like cultural differences, language barriers, financial implications, and operational efficiency. Understand the value of the products you are taking to the new market and align them to the specific needs of the local customers.
