Making the decision to expand your business over to a foreign country is a daunting prospect, especially if you have never done so before. Moving any business overseas is a relatively long and tedious process, however, if done correctly, the benefits far outweigh any potential drawbacks. Sometimes the only way to grow your business is by taking a leap of faith and entering a new market.
If you successfully launch, or expand, your business abroad you can increase the longevity of your brand, products, and services, as they will no longer be reliant upon a single market. If your product is dependent on seasonal or cyclical demands, you can use international markets to your advantage and ensure that you are selling your products all year round. Whatever your reasons for expanding overseas, here are some essential factors that you should consider before doing so.
Can You Afford It?
First things first, you must do your due diligence and work out whether expanding your business will actually be profitable in the long-term. There are many costs associated with expanding your business overseas. This includes fulfilling new production costs to satisfy international markets, as well as the overheads of setting up a business in a foreign country.
You will need to think about including rent, furniture, equipment, and other similar logistics in your budget. Don’t forget to factor in the different exchange rates, customs, taxes, and any international delivery fees you may come across. The initial costs may be slightly overwhelming, however, if you are confident that there is a need for your product or services overseas, and that you can make a profit, you should leap at the opportunity to do so. You have the chance to create a global brand and the possibility to tap into different markets overseas.
Is There a Market?
After you have established whether you have the funds to relocate or expand your business, you should work out whether there is a potential customer base overseas. There is no point in shifting all of your product or services to another country if no one is actually going to buy them. You shouldn’t just focus on whether there is a demand for your product or services, you should also scope out any potential competitors.
Every country has a unique demographic and there are many cultural differences, especially if you compare western markets with eastern markets. The consumer behaviors in Canada may be very similar to the United States, however, in Saudi Arabia, you are dealing with a very different set of cultural norms and behaviors. Our advice is to carry out extensive market research before deciding which country is right for your expansion. Another great way to get the inside scoop on how business works in a foreign country is by creating some local alliances.
Is There Talent Available?
Many entrepreneurs will offer existing staff members a handsome relocation package for moving to a new country. If you are thinking of relocating staff, you should also consider providing them with Group International Health Insurance whilst they are abroad. Letting your employees know that you care about them and their wellbeing will make them more inclined to move and do their job well.
Before you decide to pack up your company and move it across borders, you should consider whether there are enough skilled workers in the area to get the job done. You should also bear in mind that foreign countries will have different laws when it comes to both hiring and firing staff. Local talent may not always be easy to find and the hiring process could be lengthy. If your business requires highly skilled workers, make sure that these are available in the country you are re-locating to. You want to have a reliable group of staff so that you can hit the ground running once you open up shop.
Before you begin to put in the groundwork, make sure that this expansion is both necessary and favorable for your business. Some business owners believe that in order for a business to grow, they must enter new markets and expand. However, this can be a complicated and expensive process that may not be worth the effort financially. Planning is key as you want to ensure that you have the funds to support both the initial investment and growth that you have forecasted.
On the other hand, if you are certain that your overseas customers truly exist and that there is indeed a demand for your product or services, go ahead and expand on an international scale. Not only will you have increased your potential to generate revenue, but you will also access a new customer base, improve your company’s reputation, gain a competitive advantage, and diversify your markets.