Taking your business to a foreign market is a complex and expensive process. That being said, it also brings with it some substantial potential for reaching new clients, boosting your brand, and gaining a competitive edge in your industry.
If you are ready to take your business to an international market, then there are many steps that need to be taken.
Here are a few questions to ask yourself before taking those steps in order to set your business up for the best chances of success in a foreign market.
Do You Have the Required Capital?
Expanding your business into international markets is no cheap venture. There is a requirement for quite a bit of upfront capital. If you don’t have the capital necessary of your own accord, perhaps you should seek out an investor to help you get things off the ground.
Furthermore, depending on where you are looking to expand to, the currency of your native country might have a lesser value when compared to the currency of the country you are hoping to set up shop. Make sure to assess the value of your capital against the appropriate currency.
You will want to plan for all contingencies that could arise in the long term as well. There are some hidden costs to expanding internationally that could ruin things for you in the future even if you get off to a good start initially.
For example, there are different rules that apply to the treatment of employees in different countries. This can mean that if you wish to terminate an employee in your foreign location you might have to give them a much larger payout that you would back home.
Be sure that you have the capital necessary to carry you through while you wait for your international business to become profitable.
How Will You Hire Local Employees?
The recruiting and hiring of employees for your international office can be a tricky process. Various countries have different customs and regulations when it comes to the
standards for employment. More difficulty can arise from not being fluent in the local language as well. Much confusion can result when things get lost in translation and time could be lost, leading most likely to a waste of money.
One option available to you is to seek out and enlist the services of a local partner. Such organizations are designed to deal with the legwork of employee recruitment on behalf of foreign businesses wishing to expand to their country. These professionals know the ins and outs of hiring employees and, since they are locals as well, you don’t have to worry about things getting lost in translation.
Finding such organizations isn’t difficult, either. If you wish to expand to Japan, for example, a simple search for recruitment in Japan will allow you to find the right local partner to help with your expansion. Doing so will aid you to not only find the right employees for your new offices, but also ensure that the cultural needs and regulatory standards for those employees are sufficiently met.
Have You Done Enough Market Research?
Before you take any real steps towards expansion, it is critical that you do enough market research so that you can know exactly what you are getting into. Furthermore, you need to make sure that the type of business you run is a good fit for the country you wish to expand to.
One of the challenges that you will probably face has to do with the way your business is branded. You will need to adjust your branding to fit the local language and culture. If you don’t already have at least a loose grasp on the local language, you will want to make this a priority before you expand to a new country.
Some cultures might not have a need for the product or service that you offer. Others might have a number of businesses that already do what yours does. If you aren’t sure where to begin when it comes to the market research that you need to do prior to expanding, then you could always look into hiring a local market research firm. Such firms can help gain information about potential target demographics, the compatibility of your business with the market you are looking into, as well as information about competitors.
Is Your Business Compatible With Local Regulations?
From a regulatory standpoint, the country you wish to move to could have certain regulations in place for your industry that your home nation doesn’t. Understanding and abiding by these regulations might not be a feasible ask for your business model. You also need to assess whether or not your company is prepared to pay taxes in both your home country and the foreign nation you are expanding to.
Other things like intellectual property filings and your company’s terms of service will need to either be adjusted or redone entirely. This can amount to quite a lot of work upfront for which you will very likely need the assistance of an experienced local attorney to complete properly.
Another area where you will need the guidance of local experts is real estate. Whether you wish to rent an office space, or purchase one for long-term use, understanding the real estate regulations of a foreign country can be quite difficult.