Your business is growing — and growing and growing — and you think it might be time to consider moving into a new, international market. Going international certainly feels like a marker of extreme success — but if you aren’t careful, going international expansion could be the move that causes your business to fail.
You need to perform due diligence before you commit to an international expansion. To get you started, here are a few key questions that should guide your growth strategy.
How Much Will It Cost?
Expanding overseas comes with a variety of costs, many of which are much different from costs incurred from expanding into the next state over. You need to factor in expenses like travel to and from your market and customs for shipping your supplies and products to a new country. You may encounter unexpected cultural expectations that incur additional costs, like bribery of officials. Plus, your expansion will likely put your business into contact with a new currency, and fluctuating exchange rates could at times cause you to sell your products at a loss.
Before you expand, you need to conduct a thorough review of expected costs, which you can compare against expected revenues. If the margins are dangerously thin, you might rethink your expansion.
How Do Taxes and Regulations Differ?
You might be comfortable with your current corporate tax rate, but when you expand, the taxation expectations on your company are likely to be higher than you are used to. Many countries have higher corporate tax rates than the U.S. — with the exception of a few notable corporate tax havens — and you should look deep into the tax laws of your intended destination. Similarly, you need to consider how earning money overseas might affect your taxes at home. Global tax compliance is vitally important to business success, so taxes are not something you can simply ignore.
There are other legal considerations you might need to make as you expand. Employment regulations, for example, will likely differ from those you are currently accustomed to, and because they will affect how you can hire and manage your workforce, you must strive to understand them. It might be useful to hire a legal team familiar with all corporate regulations of the area into which you are expanding, so you will not be surprised by any applicable laws.
How Will It Affect Marketing?
Your current marketing campaign has been finely honed to pierce the heart of your home audience, but as you expand, your marketing methods will need to change. First, other countries have different laws and regulations about how companies can advertise. However, more importantly, the audience in your new market has a different culture, a different language (or dialect), and different expectations for corporate behavior.
You need to adapt your brand messaging to fit every unique local environment into which you expand. Even if you have an in-house marketing team, it might be wise to work with a local marketing firm until you grasp the consumer culture and customs enough to create your own targeted marketing strategy.
How Will You Staff?
Will you transfer some of your existing staff to your overseas operations, or will you hire new staff from the surrounding areas? Will you allow employees to work remotely, or will everyone need to be physically present on business premises? Because your business does not exist without workers, you need to think critically about what you want your workforce to look like and how you want it to function before you expand.
Will Your Fulfillment Strategy Change?
Currently, you have rock-solid procurement and supply chain processes International Expansion allows you to create business products and get them into customers’ hands — but these processes might only facilitate fulfillment in your current place of operation. As you expand, you might need to shift your fulfillment strategy to make your operations simpler and more affordable and to account for how customers in your intended destination prefer to shop for your products International Expansion.
Will You Be Able to Perform QA?
You want to be confident that your business is offering the same quality of products everywhere it operates, but if you cannot perform quality assurance, branches of your company in other countries might be producing worse products and disappointing consumers. You need to understand how your products might be affected by being sold in another country; for example, longer travel might increase the risk of damage or spoilage. You might find greater comfort installing a trusted employee to oversee quality as your overseas operations get up and running.
A growing business needs somewhere to go, and the International Expansion business can be lucrative. Still, such a significant business decision must be backed by research and planning, so your expansion will be a smashing success for International Expansion.