Posted by Shivali Anand
November 10, 2021 | 4-minute read (756 words)
International expansion is not for the faint of heart. But it is the next natural step for many businesses since global markets can provide significant growth prospects.
While creating goods for a worldwide consumer base and cultivating multilingual and multicultural brand awareness adds layers of complexity, going global can yield excellent benefits and ensure a competitive advantage. So, how do you know when it's time to go global with your business?
Going global might be right if you have a solid business foundation and have performed due diligence on the markets you want to penetrate. Due diligence in this instance entails assessing how much of a direct presence you'll have in each country, as well as whether you’ll need local partners. You’ll also need to consider whether you've lined up the necessary suppliers to provide an excellent experience for international clients.
Short list: 10 things to think about before going global
Take these ten elements into account before embarking on a worldwide expansion.
- Price: The first question to consider is whether you can afford to expand your business internationally. Office space, customs, shipping and manufacturing are just a few of the costs associated with a worldwide company. Work with experts who can advise you on the prices of various growing regions to ensure that you have the funds necessary to carry out your expansion ambitions. To minimize unexpected cash flow concerns, list all your expenditures and make sure they balance against your planned income and profit.
- Tax and employment rules: Each country has its own tax and employment regulations, and they are not always easily understood. For example, in Mexico, several bodies are responsible for employee safety, each with its own set of rules that might be conflicting at times. Legal restrictions have an impact on everything from submitting tax returns to recruiting personnel.
It's also crucial to learn how your home country handles overseas money, as this might have a substantial impact on profitability.
- Marketing strategies: "Think globally, act locally," as the phrase goes. Expanding into a new geographic location requires adapting marketing strategies to conform to the local regulations and expectations. While language is vital, it's equally necessary to comprehend the deeper meaning of communications across different cultures. Engage the services of a local marketing professional to help present your company in the best possible light for local audiences.
- Brand-building: If you want to extend your business to a location where few people are familiar with the brand, you may incur significant advertising expenses to raise brand recognition.
- Hiring: In a global market, the kind of people you'll hire for different tasks may vary substantially in terms of availability, culture and training. While you can opt to recruit remote workers if you can't locate suitable staff on the ground, it's a good idea to select a locale with a large pool of qualified candidates. You may also hire a recruiting specialist to help find the right employees for your business.
- Logistics: From the beginning, it's critical to have a well-conceived fulfillment strategy. Ideally, you will have rapid, high-quality and cost-effective logistics for your business, from warehousing and packing through shipping. Look for a partner who can assist you with global fulfillment by aligning with your expansion objectives and providing speedy delivery software, among other services.
- Packaging: International packaging is another factor to consider. Each country has its own rules and legal requirements, so be sure you're correctly packaging your goods. Some countries, for example, require warnings on cigarette packages, while others do not. Regardless of the area, your packaging is an essential aspect of your marketing strategy.
- Currency: Exchange rates fluctuate, sometimes a lot. Because you can't always set your prices based on international currency rates, you may end up selling at a loss. Furthermore, some countries limit the amount of money that can be taken outside its borders. This can lock your gains in the country where they were generated, limiting your ability to use that money to pay financial commitments outside of that country.
- Geographical distance: Quality is always a priority, and shifting items from one region to another may influence quality at the destination. Fresh produce, for example, traveling long distances increases the possibility of spoilage or loss. Establish a quality assurance system that takes such factors into account.
- Economic and political stability: Geopolitics can be unpredictable. When considering worldwide growth, make sure your company has adequately analyzed the degree of risk involved. If a particular country poses a significant threat, it may be best to stay away entirely.