Every business owner dreams of becoming an international business mogul who ends up on the cover of magazines across the world. Doing so involves much more than just hope and a dream. You’ll need to prepare your business through a global expansion strategy and different business growth strategies.
But what is global expansion and how does it benefit your company?
A fundamental part of business growth is expanding your customer reach. Moving your business across borders and oceans is a major part of that process.
Pertaining to your company, global expansion is adding more branches and employees across the world. Here are five ways to get started.
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Find the Right Partners in the Area
Breaking into a foreign market can prove a difficult endeavor if you don’t know anyone in the area. You may not understand the local culture, who the main players are in your industry, or how to find local talent.
A PEO can provide ample information and assistance in deploying or recruiting new talent. They can also help establish an international presence in a new market without needing to set up your own subsidiary. However, it’s crucial to determine which of Employer of Record vs PEO best suits your business needs, as an EOR offers a more comprehensive solution for managing international employees and ensuring compliance with local labor laws. Hiring one is a good first move regardless of your location.
Another way to tackle a new market is by looking for influencers. Build a relationship with them before you begin expansion. They’re also a valuable resource for developing a network in the area as well as developing your ideas.
There’s a good chance that this influencer can become a future partner in your expansion. At the very least, you could rely on them for information.
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Assess Your Capital and Budget
Launching any new campaign requires some kind of financial security. After all, you often have to spend money to make money. Business growth through a global expansion is no exception.
In order to find financial success overseas, you’ll need a long-term financial plan.
What are the costs for entering this new market? How much revenue do you expect to make? At what point does it not become worth the financial investment?
One of the first parts of creating your financial plan is deciding which country to expand into. Avoid countries with a low national income per person. You also want to pick somewhere with high ease of doing business.
Keep in mind the extra costs to enter a new export market. Your product may need customization depending on the local culture and laws. Expect to adjust your services to what the people need.
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Research Global and Local Compliance
Not every country has the same laws or obligations as other places in the world. You may meet all of your obligations and commitments in your current area, but that doesn’t mean you’re prepared for global compliance.
In other words, your company must comply with tax, financial reporting, employment, and product safety standards and laws. You’ll need to hire a corporate compliance officer who will be in charge of ensuring your company meets all its obligations.
For example, most jurisdictions require employers to withhold payroll taxes for their employees. In more recent times, there are also digital taxes applied to online businesses if they have significant business in a country.
One way to manage your global compliance is by building compliance into their business operations. Introduce strong governance processes and consider joining with an international compliance partner.
Failure to maintain global compliance can result in criminal penalties and reputational damage. In 2020, both Google and Amazon were fined by France for failing to get customer consent to drop non-essential cookies. Google lost $120 million while Amazon lost $42 million.
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Hire a Market Research Firm
An important step any time you’re making a change in how your company operates or when you release a new product is running market research.
This process determines the viability of your new service by analyzing your competition and potential customers. It provides critical information about the current state of the market and can tell you how your target customers and clients will react to your company.
A global expansion strategy should include hiring a market research firm in the area to learn whether you’ll be successful there. Is there a market for your services or products? And how will your brand transfer into this foreign market?
When performing research, make sure to choose a specific country. Customers identify at a national level and every country has its own laws.
You should also prepare to adapt your product offering for your new target audience. The same goes for your pricing models.
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Understand Language and Cultural Barriers
Language and cultural barriers can prove a significant hurdle when trying to expand into another country.
Not speaking the same language can cause a myriad of misunderstandings. You’ll have to rely on a translator, which can slow down your meetings and chain of communication.
How people behave and use body language will differ depending on the culture you’re in. What may seem appropriate in your workplace could be seen as highly unprofessional in another.
In addition, you’ll need to understand the local work environment and work ethic expected from your company. For example, the official work week in India runs from Monday to Saturday.
Utilizing a culturally diverse team provides a unique opportunity to produce more creative results. Even though it may be easier to send your own workers abroad to manage the operations, you’ll benefit from including locals who know more about the region’s people and their expectations.
Avoid Mistakes in Your Global Expansion
Anyone planning a global expansion will need to make the necessary plans beforehand. This kind of business growth doesn’t come without a cost, and you want to be sure you’re not wasting time or money on the wrong things. You also don’t want to expand into a country that won’t receive your business well.
There are various services available that can help you find a footing overseas. Use them to streamline the process and make some work connections along the way. You won’t regret putting in the extra effort.
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