Economists are always interested in growing markets, and a trend has emerged in the last decade or so. The fastest-growing markets are all emerging markets, like Chile and India. If you’re hoping to grow, expanding across international borders could be the answer.
Global expansion is a risky venture for any business, large or small. Careful planning will help you succeed in whatever new markets you decide to open up shop in. Before you hop the next flight to company expansion, put these planning tips on your itinerary.
1. Do Market Research Before Company Expansion
The first thing you should do is market research. You may think your product or service could easily be exported to any given market.
Chances are your business won’t thrive in any given market, at least not without the proper strategy. A product you offer may not speak to the local culture. An emerging market may not be interested in the services you offer.
This is why market research is so important. It helps you identify where gaps exist in new markets. You’ll have better information about what services and products are already available. If there’s a gap, ask why it exists.
Market research can also help you gauge demand for what your business offers. If people are interested, there’s an opportunity for you.
2. Learn and Adapt to Local Culture
Once you decide where doing business internationally makes sense, learn about the culture. What’s their culture like?
For many global markets, you’ll also be looking at a language barrier. Although English is common in the business world, it’s just one of thousands of languages. One or more of these may be an official language where you decide to do business.
Learning the language of an international market can be make or break. You can find out more about the top ten languages your team will encounter when you decide to grow globally.
3. Learn about the Legal Environment When Doing Business Overseas
The legal environment is another key component of a successful company expansion. If your business operates in a few states, you already know laws differ between areas.
When it comes to international markets, you’ll face new laws at both the national and local level. Culture is a huge influence here as well. A collectivist culture may invest more in social welfare programs.
Taxes are another major difference. They can depend on your business structure. Be sure to do your homework when it comes to learning about your options.
You should also do your research on special laws that apply to your industry. Employment law is another area to brush up on.
4. Grow Globally with the Right Funding
Financing can be a stumbling block for a company doing business overseas. How will you pay your employees? Do you need to buy insurance or real estate? What currency will you need to process transactions in?
There are many unknowns when it comes to expanding overseas, so having funding in place is a good idea. You should look for help from your local government first. They may have fund designed to help companies like yours expand, such as an import-export bank.
Other types of funding, such as loans or venture capital, may also be available to you. Keep in mind the purpose of any funding you hope to secure, and weigh your options. One option may be better for payroll, while another is geared to buying real estate.
5. Hire the Right Employees
Another challenge when doing business overseas is having the right people on staff. As you expand your business, you’ll likely want to send a team of your senior people to oversee the expansion. You may also want to hire skilled people to fulfill functions such as customer service or sales.
Hiring the right people for you team is often challenging enough on your home turf. When it comes to hiring in a foreign job market, you may find yourself at a disadvantage.
Before you expand overseas, take a look at your hiring process. Be sure to streamline the process. You should also be ready to adjust your interview questions.
Finally, do some research into the job market. If certain skills are in high demand, you’ll need to ensure your job offer has the ability to compete.
6. Get a Helping Hand
Rest assured there’s plenty of help available for global expansion. Legal counsel can help you learn local laws and adjust your company policies to follow them.
Business consultants, financial advisors, and employment specialists can lend a helping hand. Getting the right advice at the right time can make all the difference to a global expansion effort.
Don’t be afraid to reach out to experts in your own country or in your destination market. Their insights will be invaluable.
7. Check Your Readiness
You have many more things to do before you complete your company expansion. Before you get any farther, take a look at your company readiness. You’ll want to test everything from your product or service to your organizational readiness.
If you’re having staffing trouble at home or you’re in a financial crunch, expanding may tax your resources more. If you seem to have stalled out growth on the home front, expanding may be a wise move.
Readiness is more than having the right people and finances in place. It also means having access to the right resources and having a strategy in place for expansion.
Get Your Company Growing
A well-planned company expansion is bound to be more successful than one that’s done by the seat of your pants. Following these tips will put you on the right path.
If you want to grow your business, but you’re not sure international expansion is the right choice, check out our blog. We have plenty of ideas and advice for small business owners like you.