While not all businesses want or need to have international expansion, you’ve decided that it’s time for your company to go global. When you’re considering an expansion from a local or even national business to an international company, there are a lot of steps to consider. Knowing how to expand your business internationally requires a lot of thought, preparation, and help from business associates.
Before you make the jump into international waters, take stock. As yourself a few questions:
- Is there an international market for my business?
- Which countries would benefit my company, and which countries could my company benefit?
- Does the company have the resources for this expansion?
- Are there any upcoming changes or developments in the company that could negatively affect the expansion?
- Do I have business contacts in the countries I plan to move into?
Being able to answer these questions puts you in a much better place to push forward with your expansion.
If you haven’t done market research in the countries you’re interested in moving into, you truly won’t know if this expansion is a good idea. In addition, it’s crucial that you have the right resources to support both the new sites and the old. This includes not only income but also staff.
Having business relations with others in the area you’re trying to move your business into helps you establish your business more effectively, and it can also help you navigate through legal and logistical pitfalls. If there are other big changes coming to your company, this can throw off the expansion and make everything more difficult.
Luckily, expanding business internationally doesn’t have to be a dark and stressful experience. There are so many upsides to international expansion, along with the possibility of huge benefits to your business. Make informed decisions and consider your options carefully before making a push into new countries.
Know your industry inside and out
If you’re considering international expansion, it’s likely that your company is doing well and you have a good eye for the market. Keep in mind that this is only your local or national market. You need to take a look at the broader international market for your industry. Pinpoint which countries could benefit from your products or services. Then, consider the state of the industry in these countries, and where the industry looks to be moving. Even though things can always change, having a clear picture of the current and possible future of your industry allows you to make the right move.
Along with knowing the industry and how it moves, you also need to take a look at your competitors in these other countries. The competition is likely very different, depending on where you go. Take the time to learn about your competitors, what makes them successful in the area, and what mistakes they have made that you can learn from.
Consider the business model
There are so many different options for your business model, and considering the different options in a new area is important. Some business models won’t translate well when you expand, and you might find that you need to change things a little in a new country. Different options to consider include joint ventures, off-shore production, importing, exporting, and licensing. Of course, this all depends on your business and what you offer.
Explore your resources
One of the most difficult parts of expanding into new areas is simply having enough resources to make the move effective. You need to be able to find the right office, retail, or factory space. You need to make these spaces into something that will work for your business, with equipment and accessories. On top of this, you need to make sure you have all the proper documents and paperwork and have paid any necessary fees for your business to move into the area you choose.
In addition to the financial resources required, it’s important to make sure that you have the right staffing. Don’t expect to take almost all of your staff to the new office and still have the original office run as smoothly and effectively as it once did. In addition, don’t expect that you can hire all new people and they’ll do things exactly how you want. You need a good mix of current staff and new employees at your new location to make the expansion as efficient as possible.
Learn the barriers
When expanding your business into a new country, you’re going to experience cultural barriers, language barriers, and more. You need to learn what these barriers may be and how to overcome them. Does someone in your organization already speak the language? If so, that will help significantly in the expansion process. However, if no one in the company is fluent in the local language, you’ll need to hire an interpreter. Working with vendors, business partners, and local officials becomes exponentially more difficult when you can’t understand one another.
A more significant problem than the language barrier for most companies is the cultural barriers. You need to understand the local culture, the expectations of businesses in the area, and what you should and shouldn’t do in business relations. The more effort you put into learning these cultural differences, the easier time you’re going to have, and the better you’ll understand the area choose.
Differences in business
One of the biggest shocks for many when they’re expanding their companies overseas is the difference in how business is done. The pace of business across the globe varies significantly depending on where you are. If you’re currently based in the United States, you’re likely used to a very fast-paced business environment where employees are working long, hard hours. You may not ever talk to a business contact outside of the office or a business meeting.
In other countries, however, business is significantly different. In many countries, there is a long, slow process of building a relationship before you’ll ever even have a business meeting. You may find yourself having tea, attending banquets or parties, or even going on a weekend trip with a potential business partner before they’ll commit to anything. In addition, each country has its own laws and cultural rules for how long the business day is, how much time off employees are allowed, and more. Make sure you understand these differences and comply with them.
Compliance and regulations
No matter where you choose to expand, you must work with local officials to ensure that you have all the permits you need to operate your business legally. Depending on your business, you may have specific regulations or compliances you need to follow. Before opening your new office, spend some time with local business owners as well as officials to get a clear picture of what is required of you and your business.
You already have branding, and if you’re planning to expand internationally, that branding is likely well-known in your industry. You need to keep your branding consistent even in your new market. While there is definitely room for flexibility depending on the cultural needs and norms, you should ensure that any branding you use is still recognizable as yours.
Choose a location
While you may have decided that you want to expand into Europe, you need to get a lot more specific to ensure that your international expansion goes smoothly. Explore your options and make sure you research the areas that you’re most interested in. Look at what the business districts are like. Can you find a spot near local public transportation, making it easier for employees? If you plan to host business meetings, are there adequate conference, hotel, and dining options close by?
Choosing the right location is a critical part of expanding. While this is likely one of the last steps you’ll take in your global expansion, it can make or break your move into a new area. If you’re not well-situated, it is difficult to get employees excited and in the office. If you’re selling items in retail space, you need to ensure that you’re in a pleasing and easy-to-access area for customers. Keeping this all in mind helps you find the perfect location.
Before jumping into a global expansion, take some time to examine whether this is the best idea for your company. For many businesses, global expansion is the perfect option. In these cases, consider the tips above for an easier time with your company’s growth.