How to expand your business internationally?

How to expand your business internationally?

Long ago, taking advantage of market anomalies in distant parts of the globe, starting a business abroad could be much easier, less risky, and more financially sound than setting up a business in your home country.

There are ample opportunities in emerging markets for small (or large) business owners with a skill set different from the local population.

Having built a loyal customer base in your home territory, international expansion could be the next step to keep your business growing.

Becoming a global company is impressive, but only some businesses are designed to meet the challenge.

It would help if you thought about many things before selling and marketing your products or services in another country. For example, do you have a potential customer base in the foreign markets you want to enter?

A product that sells well in its home country may have a different appeal in another country.

First, ensure your customers exist in the countries you want to expand to. Is there a need for your offer? Are they inclined to buy? Don’t think they can – make sure they will.

For this reason, Michael Lee, director of international marketing and business development for the e-commerce platform Alibaba.com, recommends looking for markets similar to yours.

Although the business environment will be different from your home country, you should be familiar with the market to hold business discussions without any problems.

Consider trade barriers, proximity, currency, and culture. Look for homogeneity; the fewer differences between your country and the country you export to, the easier it will be to do business with that country.

The challenges of international business

No business decision comes without obstacles, but international expansion comes with its own unique set of obstacles.

Here are some challenges to prepare for before expanding globally by “going global.”

Language and cultural barriers

Hire bilingual staff to translate for you. You can outsource tasks like customer service abroad if you need more money to hire full-time translators.

Different cultural norms are another obstacle. We suggest you investigate cultural practices in the countries where you plan to expand.

The needs of foreign customers and business partners are likely different from those of domestic stakeholders.

Tax Codes and Compliance Issues

Learning the different tax codes, business regulations, and packaging standards in different countries can be challenging.

Foreign banks may also be reluctant to deal with an account based in a country with many administrative burdens, so you may have to set up a foreign business entity and account to do transactions.

In addition, packaging regulations are different from country to country. In some countries, companies only need to include instructions that are in English and perhaps Spanish.

But in Europe, your instructions, even for the most specific product, must be in multiple languages, sometimes as many as 24.

If your product sells more regionally, you will need to consider the increased cost of packaging associated with labeling; your product will need to be certified to those countries’ standards.

Patience in the process

In America, the business world moves fast. Businesses move at a different pace in other countries; Building relationships is a long-term commitment.

Abroad, doing business is as much a personal as a professional event. Things will always take longer to figure out abroad, but that’s not necessarily a sign of a lack of momentum. You have to be patient and prepared for multiple interactions to build trust.

local competition

It isn’t easy to persuade a foreign customer to trust your brand when a similar product is made in your home country.

While some large chains have influence abroad, small and medium-sized companies must work harder to convince the international market that their brands are trustworthy and better than the competition.

Why would customers buy from you over a local business? Can you penetrate the market? If it does, can it be profitable in those circumstances?

Advice and best practices

If you feel you’re ready to take on the challenges of international business, take this advice from business leaders who have walked in your shoes.

Find the right partner and team.

You’ll want a great team and partner if you plan to expand globally. Even if your “partner” is a mentor, you will want someone you can trust and who can vouch for you.

You’ll need someone who has a passion for your brand, understands the local market, has industry experience, has the necessary capital to grow, and ideally has different businesses where you can take advantage of shared resources.

The people you should hire to deal with your overseas business partners and clients must be fully immersed in the local environment, but you must also be looking out for their interests.

You will be at a competitive disadvantage without a core team with the necessary cultural, linguistic and local contacts.

Consider the impact of any new idea.

Instead of just thinking about how customers in your own country might receive your new ideas, you’ll need to consider how foreign customers will receive your ideas.

Time zones, language and cultural identity all have to be considered when you branch internationally.

If you do this in advance, you avoid offending your international partners by appearing to be more concerned about yourself than them.

Stay consistent on the brand, but adapt to the environment.

Cultural norms and customer needs vary in foreign countries, where you may require an adjustment in your sales approach or even your product.

While you should stay true to your brand overall, adjusting your product offerings to consider local tastes is essential.

Proper location and flexibility should be allowed to meet local customs and customer needs.

One of the critical areas to adjust is the supply of materials.

If you can maintain quality, sourcing locally has the opportunity to improve cost margins and supply chain reliability.

Always do your due diligence.

Before making important business decisions, consider all possible scenarios, especially during international expansion.

It is advisable to travel to the country or countries in which you want to expand and get a first-hand idea of ​​how your business will work. This will allow you to research and test your product in a foreign market.

Research every aspect of your business strategy. Explore various alternatives and safeguards, do everything you can to understand the markets you’re entering, and take your time to get it right.

4 Ways to Take Your Small Business International (and More!)

You want to grow your small business into a global company, but you need to figure out how.

It’s a big world, and no country, culture, or community is the same. Recognizing that this fact is the first step to expanding internationally.

Knowing as much as possible about where you want to do business is paramount.

A recent ERC global survey of senior executives at over a hundred global companies found that 95% of respondents believe that the national cultures of the places where they do business play an essential role in the success of their business mission…

Here are some tips to help you expand internationally :

1- Use international social media platforms. 

QZone in China,  XING in Germany, and VKontakte in Russia are some channels with large member networks.

They are used for personal and business reasons and are turned to by recruiters for talent and local and international companies.

These channels could be great tools to assess whether your business, product, or service can appeal to specific local markets.

Using them can also be a great way to network with people there; You could join a group of other professionals.

For example, at XING, you can create your professional network with European connections.

When you travel to the country where you want to open a new branch, always remember to take photos and post them with the dates and notes, and if you have a blog, write a post with your experiences and steps that you have been achieving.

On each trip, schedule meetings with key business partners so that, little by little, you become known. These posts will generate more business for you and your company.

2- Meet with local investment organizations. 

There are economic development agencies, organizations and even companies to help stimulate and support foreign investment in the respective countries.

Set up meetings to get a land distribution and learn about critical contacts, strategic opportunities, political landscapes, and legal protocols.

Every market has nuances that can catch you off guard and make your investment more expensive or complicated than you planned.

For example, Africa is booming due to investments in the oil and mineral business, and the government is concerned about how business can affect society and the community.

To be successful in this area, companies must have close ties to the government; if you try to do business in this region without state officials and diplomats at the table, chances are your deals will be blocked.

3- Attend international conferences. 

These offer valuable opportunities to learn about hot topics and form critical partnerships in your potential growth areas. Research the key conferences in your industry, and go with a stack of business cards, information, and a willingness to talk.

4- Ask for introductions. 

You could be close to forming a strategic partnership, learn about how to identify a promising opportunity or gain valuable knowledge or talent.

You can never know too much or have too many people know about you and your business.

16 steps to successfully expand your business abroad

“going global” is the worldwide movement toward economic, financial, trade, and communications integration.

The concept of globalization dates back to the Roman Empire.

The concept was recently popularized by Thomas L. Friedman, who argued that the pace of global trade, outsourcing, and chaining of supplies was accelerating and that its impact on business organizations and business practices would continue to grow in the 20th century. XXI.

For small and startup companies, “going global” is when a significant business could disrupt its existing business activities.

Therefore, CEOs and business leaders must understand their full impact and determine whether the benefits outweigh the risks.

Stakeholders across the organization are invited to carry more responsibilities to continue executing day-to-day activities in addition to the global initiative.

Taking a small business global is a complex and dynamic process.

Gaining a deep understanding of target markets, competition, current local market trends, and the requirements to launch and drive growth successfully lays an essential foundation.

To help grow your business internationally, follow these top 16 steps :

Conduct In-Depth Market Research

Before going global, it’s critical to understand the full impact on your business.

• Prepare a market segmentation analysis to determine if your product will sell locally.
• Prepare a  product gap analysis against local products. Is there any demand that needs to be satisfied by a local company?
• Carry out a  SWOT analysis against the competition. Your product will be more expensive than local products. Will the market buy your product?
• Consider market/size opportunities. How big is the market and how long will it take you to capture targeted sales?

How to expand your business internationally?

Develop a Strategy and Business Plan

Each market has nuances due to economic, cultural, government and market conditions.

It is essential to develop a localized strategy and business plan that drives local success while remaining integrated with the company’s overall strategy and goals.

• Define short, medium and long-term strategies. Set reasonable goals to measure progress and costs/benefits.
• Define goals, objectives and success metrics.
• Complete the business model and structure. Decide whether to set up a separate company, branch, or sales office.
• Develop a top-down annual budget.
• Develop a tactical project plan with commitment dates.

How to expand your business internationally?

Establish a high-impact team

Many global companies try to launch with executives from the parent company or quickly build a local team from scratch.

This is time-consuming, risky and reduces time to market. Using proven interim senior executives allows the company to hit the ground running, quickly validate assumptions, and drive key readiness initiatives while hiring the right management team.

• Bring senior-level interim executives with deep domain expertise or outsource interim leadership to executive leadership organizations.
• Establish financial infrastructure: Consider outsourcing it to local service providers.
• Begin the recruitment process for the permanent leadership team.

How to expand your business internationally?

Preparation of the product

Based on the product gap analysis, take the necessary steps to market your offerings for high-impact product differentiation.

• Review specific government and industry regulations to ensure compliance and certifications are obtained if necessary.
• Determine if any product localization is needed. Pay close attention to translating your product name into the local language.
• Initiate a patent and trademark review: Some countries are notorious for “copying” good ideas.
• Initiate testing and quality assurance reviews based on local standards.
• Consider a local logistics and distribution network. Who will sell your product, and how will you get it?

How to expand your business internationally?

Organizational readiness

Cultural differences, whether in language, regulations or customs, require a company to be flexible in the policies and procedures implemented in an international operation to ensure that employees commit to and execute the company’s plans.

The “one size fits all” mentality may have short-term benefits but will have long-term adverse effects.

• Assess the organizational structure needed to execute your strategy successfully.
• Develop policies, procedures, and manuals that meet local requirements while balancing general company policies.
• Develop competitive benefits programs to attract qualified local employees.
• Develop competitive compensation packages based on local regulations and customs.
• Develop a local information technology infrastructure that is compatible with your home infrastructure.
• Manage payroll and HR functions-again, a process that lends itself to outsourcing.

How to expand your business internationally?

Establish an effective Market Strategy

Effectively selling and marketing your products or services requires a comprehensive and coherent strategy that addresses sales strategy, sales delivery, brand/value proposition, marketing strategy, and marketing programs:

• Define your optimal sales model: direct, indirect, OEM, distributor, hybrid
• Determine your sales methodology: solution, function, consult, price.
• Determine if you will create a new brand or use the leading brand.
• Develop a comprehensive marketing plan and KPIs.
• Evaluate your pricing model – consumers in less developed countries are very price-conscious, and your product may not fit into the local economic environment.

How to expand your business internationally?

Your brand must be on online platforms.

 How else will cross-border customers find you? If you’re still thinking about whether your business should launch a blog or be on Twitter, remember to take your business global.

You need to position yourself in relevant networks and strengthen your communication efforts.

So for all aspiring enthusiasts worldwide, you must create a regular website, start a blog, and open a profile on Twitter, Facebook, and LinkedIn.

Use effective marketing to get noticed. The more online platforms you use, the better your chances of getting discovered. When a customer bites, test your price, see what reaction you get, and then negotiate from there.

If you offer products on an e-commerce platform, can customers buy them at each destination point?

Make sure they focus on customer support and compliance and are easy to use. Accessibility is essential, considering the different time zones in which we operate.

Make it easy for customers to get help if they need it. Your site must be attractive and functional.

Speed ​​is also essential when considering users in remote parts of the world with dial-up connections. Please do what you can to help them shop from you without hassle.

Technology is an integral part of your international business plan. Use technology tools to communicate and collaborate with your partners abroad.

Not only can you stay in touch with regular channels, but you can also save time and money on travel expenses.

Technology can also help you track shipments, manage paperwork, and stay on top of other essential tasks.

How to expand your business internationally?

Legal preparation

Some countries are known to be highly litigious, so solid legal processes must be implemented to minimize unnecessary business risk.

Additionally, government agencies have strict requirements that require legal documentation to be in place before operating within the country.

Being proactive requires money up front, but this more than offsets the associated risks and liabilities.

• Create localized trade agreements.
• Review industry-specific regulations to ensure compliance and certifications are obtained if necessary.
• Perform general corporate services such as dispute resolution, immigration, customs and shipping.
• Maintaining corporate records and governance – an outsourced function could work well.

How to expand your business internationally?

Fiscal and financial preparation

The proper tax and financial infrastructures must be put in place early to ensure that you receive timely reporting and that your foreign entity is complying with local corporate policies and procedures.

• Consider outsourcing bookkeeping, payroll, and taxes.
• Establish local banking relationships.
• Develop a risk management plan.
• Develop a transfer pricing study.
• Develop a cash repatriation plan.
• Prepare and report sales and VAT taxes.

How to expand your business internationally?

Prepare your final budget

The results of the above steps should provide enough data for foreign company stakeholders to develop an aggressive yet achievable final budget owned by your local team.

• Develop a 3-year budget and 12-month business plan with detailed key performance indicators and update every six months.
• Conduct quarterly operational reviews.
• Set a budget in real-time (or at least weekly) for the actual report with an analysis of variance.

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Establish close relationships with local businesses

Gain a strong competitive advantage by creating a supporting ecosystem of complementary products and services, which can come through third-party relationships. These relationships can support the scaling of the organization while minimizing financial risk.

• Negotiate alliance/partner/distributor programs.
• Develop an ecosystem strategy and business model.
• Build an internal alliance team to manage and foster relationships.

How to expand your business internationally?

Develop a flexible corporate mindset

Unlike traditional standards of corporate practice, your organization needs to be prepared to quickly adapt to changing market conditions and local government regulations, with your legal and finance teams incorporating this as part of your corporate DNA.

Try to hire people familiar with the target market’s culture and language while creating a reduced bureaucracy within the company and operating as a “more flat” organization to allow the business to adapt more quickly and efficiently to each international market.

Before jumping in, take the time to conduct foreign market research with your local competition and identify the most practical international markets where your product or service will fill a need.

Visiting the trade department of the country you want to expand into is a helpful way to gather more general knowledge about that country’s foreign markets for goods and services.

Initially, try looking for markets with easier barriers to entry before exploring more challenging markets.

How to expand your business internationally?

Trust in cultural immersion

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Aside from fully immersing yourself in local news, politics and influencers in your target market and events on the ground for yourself, explore hiring local business ambassadors who can advise you and your business on every detail to understand better and grow your business.

Businesses change quickly, but you must stay aware of the pace of business to win in other markets.

A local presence within your target market will guide you through all the changing dynamics and laws.

Just like any other marketplace, there are different tax codes and compliance issues you need to follow, as well as special income reporting requirements.

Additionally, labeling and packaging standards are other obstacles you may need to consider depending on your product or service.

Each country and region has its own set of rules and procedures; only one is no other way to stay on top of these changes than by hiring locally.

How to expand your business internationally?

Rethink your funding source

Financing your international expansion can be challenging. Do not rely on foreign banks as a source, as they often require a local “presence,” are more expensive, and can be fraught with risk.

Instead, try working with your existing bank and taking out loans abroad.

Banks often entertain these loans with slightly lower advance rates than domestic receivables as long as you get foreign receivables early.

Another back-end alternative is available for a brand-name customer where the customer’s receivables can be factored and converted into immediate cash by local in-country finance companies for relatively nominal (recourse) rates.

Market Research

You’ll want to spend a significant amount of time analyzing local spending habits and how much time, energy, and capital will go into marketing your products or services.

For this market research, try to set up a test or take surveys before investing a lot. Pay attention to how much you’ll have to pay employees or what work habits are like those in your own country.

 The Incorporation Process

The International Finance Corporation and the World Bank have a  great page that compares the costs, amount of time, and the number of procedures involved with starting a business in 183 countries worldwide.

The page is specifically for businesses with between 10 and 50 employees, but it can be a valuable tool for those looking for more minor or more extensive operations.

Some examples:

• You can form a business in New Zealand in a single day with minimal paperwork (two days in Australia).
• In Panama and Chile, setting up a business involves six or seven procedures and can take less than two weeks.
• In Portugal, the process can take as little as five days and involve as few as five procedures, but the overall economic outlook in Portugal could be more precise.
• In Singapore and Hong Kong, setting up a company involves three procedures that can be completed in three days. Opportunities exist, but startup costs could be high, depending on your type of business.
• In China, due to tedious bureaucratic processes, starting a company is a challenging task; that is why consulting firms help foreign companies establish themselves; through employment solutions for local staff or business creation in China.

Spending thousands and thousands of euros on a business degree or an MBA is not the only way to prepare for opening and operating a business abroad.

While studying business can be rewarding, the years you spend in the classroom could be productive, income-producing years if you carefully select your market and jurisdiction.

Starting your own business abroad will require due diligence and careful consideration of the abovementioned factors, but with less than €1,000 USD, becoming your own boss may not be as difficult as you might think.

For the next few years, small businesses should take a leap of faith and reinvent their business models to grow across borders.

Small businesses have just as much potential as multinational companies to embark on the adventure of being part of the globalized economy and creating a positive impact on the bottom line.

Expanding your business abroad is not for the faint of heart, but for most companies, it will be inevitable as global markets offer more significant growth opportunities.

By paying attention to detail and outsourcing administrative functions, the difficult job of “going global” can yield great results.

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How to expand your business internationally?