4 Things to Consider Before Expanding a Business Internationally
A few things for you to consider before expanding a business internationally to ensure smooth transition!
Once your business is booming in your home country and you want it to grow even more, going across borders can be the way to go. But as thrilling as the idea of expanding your business internationally sounds, it can be equally chaotic. From location feasibility analysis to corporate compliance, when you get to know all the rules you have to abide by and all the planning you must do, you might be scratching your head. But don’t worry! If you have taken the necessary steps, partnered with a compliance company, done your research, and planned for the long-term, your business expansion can be as successful as you want it be.
So, here are a few things to consider before expanding a business internationally.
1. Market Research
This goes without saying but market research is the first step of planning an international business expansion. Just because the market demand for your product in a country is hot, that does not mean that the market is feasible for you.
There is a lot more to consider than just market demand. You need to evaluate the competition, the possibility of a new entrant (you) and whether it is even needed. This is where a market research firm can help you. Not only would they research everything about a market, but also help you determine how to smoothly transition into a new market.
They will inform you of the current market needs as well as predict how your entry will be received in the market. As a result, you can make smart decisions and plan a solid market entry strategy that is sure to be successful.
2. Economic and Political Landscape
What do you look for when choosing a country to expand into? Do you just check the product’s demand, or you dig deeper into the country’s landscape too? Because the first thing you should consider when choosing a country is its economy and political stability. Research about the historical and current affairs of the country.
Observe its economic conditions in the past decade. Check the political risks involved. Is that country a rival of yours? Is there a war going on within the country? Are there too many riots and protests in the country? How is the employment rate? How is the GDP and consumer purchasing power of that country?
These are all the questions that you should ask before finalizing a country for business expansion because they are the political and economical indicators. You would not want to expand into a country that has economic risks. Make sure you study the economic and political landscape of the country before you make any decisions.
3. Laws and Regulations
Another important factor to consider when expanding your business internationally is to study the laws, regulations, and limitations of that country for businesses. Many countries have limitations on what you can import or trade with. Make sure you are not impacted by those limitations.
Moreover, you will need to comply with all the domestic laws including employment laws, trade laws, company laws, taxes, and investment laws. Most of the countries have strict penalties for not abiding by these laws and you can even face expulsion from the country.
But understanding and making sense of these laws is a tedious job that not everyone is made for. You may want to consult with an experienced compliance consultant who specializes in global compliances. Not only would they ensure that all the regulations and rules are met, but they would also keep you from making any serious mistakes over the course of your time in that country.
4. Language, Culture and Norms
Entering a new market means having to deal with language and cultural barriers that can seriously affect your performance. This involves translating EVERYTHING into the local language. You will need to plan and devise highly localized marketing and branding strategies for the country that are relevant to their culture and verbiage.
Moreover, you will need to study their culture religiously in order to know what’s appropriate and what’s not. From norms, values and religious sentiments to office culture and everyday routines, you will need to take everything into account. For instance, companies in various countries have programs for ensuring well-being of employee’s mental health.
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So, apart from learning the local language and culture by yourself, you should also hire a compliance partner who knows all about the country and makes sure that you steer clear from making any cultural or language blunders.
So, these are a few things to consider before expanding a business internationally. But do note that business expansion involves making the most difficult decisions of your career. However, you don’t have to do it by yourself. A compliance partner and a research firm can be your right hands when expanding business internationally. Therefore, make sure that you take the due diligence needed when expanding internationally.