To help you on your global expansion journey, here are 6 areas to get right when you expand your business abroad, whatever country that might be!
So you’re ready to expand your business abroad. You’ve done your due diligence and carefully selected your country of choice, you’ve identified an opportunity and a favourable environment to expand your business to. So now what? How do you get the ball rolling?
A recent survey found that nearly six out of ten UK SMEs are considering establishing their business overseas to drive growth, so you’re not alone! To help you on your journey here are 6 areas to get right when you expand your business abroad, whatever country that might be.
Define your goals and develop a strategy for your global expansion
Like any big, overwhelming goal it’s always best to break it down and set clear objectives. First of all, what are you trying to achieve with this expansion – access to better infrastructure or business environment? Increasing your customer base? Diversifying your risk? – There are many reasons to expand internationally, having a clear understanding of what you are trying to achieve will help you make better decisions along the way regarding your strategy.
Second of all, review the assets you have in-house and identify what’s missing. Where do you lack in-house expertise? Can you find a mentor or a partner to help with this? How are you going to finance the expansion – do you need to go out and seek funds? And finally, information – what do you know and what do you need to find out about to embark on this expansion. A simple way to approach this is to start with a list of questions, some you have the answer to, some you will need to research.
Tip: Download our global expansion checklist here to give yourself a structure to your global expansion and pose questions you may not have thought about.
Get to know the legal system
In a recent survey, legal advice was identified as the most useful form of guidance when it comes to setting up overseas by 46% of respondents. This comes as no surprise as the impact of getting this wrong can come with terrible repercussions.
There are normally 3 main considerations – company and employment law, intellectual property, and data protection. Understanding these three areas will help you identify the disparities from your current location and will affect decisions such as who or how many people you employ, what company set-up you choose, what intellectual property protection you will need in place, and how to set up your data handling systems.
Tip: Do your desk research first to flag any imminent obstacles that will affect your entrance strategy – it will give you a basis when you seek specific legal help further through your journey.
Decide what method of global expansion is the best fit for your business
Consider your market entry options, you may want to set up an overseas office, franchise, direct export, license, or even buy a local company. This is where knowing your business’s expansion goal is key and understanding the local environment is crucial to see what the implications of this decision might be.
You will also need to decide what entity you want to set up in the new country, what company set-ups are available to foreigners – and what the tax or legal implications are of those company structures might be. This is country by country-specific.
Get your business finances global expansion ready
With a new country comes new requirements for tax & accounting, as many companies already do in the UK, outsourcing taxation, payroll, and business accounting is a smart move. However with something as delicate as your finances you want partners you can trust.
It is also wise to see what financial incentives may be available to companies looking to set up in the new territory. Some countries offer incentives to encourage entrepreneurs and businesses to expand to their region. With the total cost of expansion often unclear, it is important not to miss out on extra funding if available!
Tip: International global expansion often costs more than expected. Make sure you have a contingency fund to ensure you can complete the expansion.
Establish a team – global expansion HR
Depending on the market entry method you have decided to pursue you will have to create an employee strategy. Local employees come with an invaluable understanding of the local culture, methods of doing business, and potential connections in the industry. However, with this comes the challenge of employing the right people, staying on the right side of local employment law, and trying to ensure the new venture is carried out in line with your existing businesses strategy. Which if you aim to disrupt may be highly important.
Using existing employees involves managing the visa process to ensure that they can legally work in the country you are expanding to whether that’s temporary or long-term. Plus ensuring they have applicable skills to succeed in the new country.
Tip: Whatever your employment strategy, make sure you have a clear idea of what decisions or actions need to be made locally and what decisions will be made centrally – then make sure you have the right people in the right locations to facilitate success.
Gather detailed information for your global expansion
This is just an initial look at some of the considerations when expanding your company abroad! To help with this mammoth task we have launched a new platform – Centuro Connect, that dives into specifics for each country helping you do your research all in one place.