Business expansion is rarely easy but expanding internationally is something else entirely. Once you’ve reached a certain peak, however, there can be few places to go but up, out and across the sea. If you think your business has reached that domestic plateau and is ready to go international, there are a number of challenges you’ll first need to overcome.
Underestimating the cost
You’re going to want to assess your capital and ensure that everything is in its right place so it is as smooth a process as possible, but you also want to make sure it’s a process you can actually afford. In this case, external help from a corporate finance team who sort international expansion preparation on a frequent basis could be the best opportunity to reduce the chance of anything out of the ordinary occurring.
Language and cultural barriers
While expanding between countries like the US, the UK, Canada, New Zealand and Australia should be more straightforward, if you want to expand outside the English speaking world then you’re going to need somebody on your team that is at least bi-lingual. Because Google Translate can only get you so far. And that’s before you even get started on the cultural considerations. You need to examine and understand the culture of the country you are wanting to expand into and ensure that your business appreciates by the common cultural barriers that could implement and restrict your business.
Research the local competition
Just because you’re at the top of the food chain in your home country, that doesn’t necessarily mean you won’t have strong competition from more established local players when expanding. Don’t just assume you’re going to touch down on foreign soil and have the same kind of power and influence you do at home. Be cautious, build working relationships with local businesses beforehand and arm yourself with as much local knowledge as possible.
Tax and compliance
Particularly in a post-Brexit world, tax, feed and tariffs can be a massive barrier for younger domestic businesses to overcome when trading overseas. For this, what you really need is somebody on your team who understands the specifics and complexities of local legal requirements in all of the countries you plan to deal in. It might just be a case of ticking the right box but the penalty for ticking the wrong box can be a pretty severe fine.
Finally, while you might be tempted to “put your best people on it” and send them across to run your new global venture for you, it’s likely they will not be taken seriously by the locals. You’ll need a decent foundational team of locals from the get-go who understand how it works in their country. At least while you’re still learning the ropes. And international business expansion is always going to be a learning experience above all else.