It is a big step. Expanding internationally is not easy for any owner or entrepreneur. The decision is more complex and risky when you plan to expand in a different region or a country. Without expertise it can be difficult to survive international expansion.
You need a solid business plan that includes the steps you will need to take. It is important to research specifics of the region that you are considering moving. For example, culture, language barriers, competition, etc.
As a part of preparing things for the transition, this article includes specific things you need to make sure before expanding your business. Let’s have a look at them one by one.
- Regulations
Countries have different regulations when it comes to taxes and employment. For example, the US has strict rules for employee safety. Other countries may have lax laws governing employee safety. Mexico has different agencies governing employee safety with its regulations that are sometimes contradictory.
You should also not ignore legal regulations because they might affect everything. For example, hiring of employees, filing tax returns, everything. You should also consider how your country treats incomes that’s earned internationally. It might impact your profiles significantly.
It is important to minimize risk when planning the expansion and consider regulations sooner. The more you keep the regulations in place, the better they will make your entry process smoother.
- Marketing
It is not something you can not overlook. For global expansion, you must alter your marketing strategies so that they fit expectations for different countries. Language is an obvious consideration but also it is important to make sure how you send the message across. Hiring the local marketing firm always helps. It will position your brand in the best light in front of the locals.
- Build a Team
Even if you plan to open offices globally or have remote workers in different countries, it is important to hire employees for different roles. In the international market, the talent pool varies dramatically in terms of skills and culture.
You might feel challenged to find employees for your business. However, you need to determine the proper management style with cross-cultural employees, and training employees. Make sure you are not spending time looking at various professionals, comparing them. The best solution is finding the best payroll services for a small business that works for you.
4. Fulfillment
If your business deals with retail products, you have to make sure you have a good fulfillment strategy from the beginning. For example, when Hyundai brought the first fulfillment in place, they brought boatloads of the parts to customize and repair their cars. As a result, when customers bought cars, they had the smooth experience of getting parts which improved the customer satisfaction.
Hence, from warehousing, packaging, and shipping you need great logistics that are high-quality and budget friendly. The best is to find a company that handles fulfillment by offering quick delivery and shopping software.
5. Packaging
Another thing to consider is the international packaging. There are regulations for packaging in different countries. Identify that packaging must align with sustainable practices in some areas.Many nations need disclaimers on cigarettes while less developed nations may overlook such instructions.
6. Currency
For international endeavors, currency is a major issue. As the exchange rates fluctuate it increases the risk when expanding your business internationally since you can not fix prices to the international exchange rates. During times of these fluctuations, you might find your business selling products at a loss which can not be good for your business.
Countries also impose restrictions on taking money out of the country. Hence, your profits might be tied up in the country you are earning. It may limit your flexibility in employing profits to meet the obligations outside the country.
7. Quality
It is always something to consider when expanding internationally. No matter what, the quality has to be a-one. When you offer quality products, your consumers will get the impression of your business. The quality defines the future of your business.
When your business travels internally, it might also affect the quality from the initial quality when the products left. For example, fresh produce could not cross large distances as they might face chances of getting spoilt or bruised.
8. Economic Stability
There is no surety when it comes to economy and politics. So whenever you are planning to expand your business, it is important to ensure your business has considered the level of risk associated with the expansion. There are always higher levels of risk and they need higher levels of profits.
To accomplish that, make sure to use prevailing and some historical information as well as forecasting to limit your risk by choosing the countries with less unpredictability.
For example, the Cuban government expelled all US companies and took over their assets and Ford had to suffer from a great loss. Economic risk comes through changes in the economic factors underpinning consumers and their purchasing power. For instance, a country with a growing middle class, such as China, embellishes a good opportunity for many businesses. Of Course there are countries that represent higher risk and it might always be a better idea to avoid them altogether.
9. Distance
One of the most important considerations when identifying where you can feasibly expand. You have to ensure that it is a country that’s within easy reach so you can deliver products that meet the demands. For example, China is famous for their low wage costs with huge numbers of employees. However, they are also very far from markets in Europe and North America. This also means that you experience long delays in products that reach Western markets.
For example, fashion products need a short life cycle and you might experience lower sales as the lead time to replenish hot fashion styles is months.
Conclusion
Here are the 8 factors to consider when you are looking to expand your business internationally. Also, it is not a complete list and we’ve only covered 9 factors in brief. The best thing is to start with these 9 factors and later on add more to this list as you find them. Let us know in the comment section below how you found this article.
