Expanding a business can be a tricky project. Do it in the wrong way, and there’s the potential for the organisation to become locked into a structure that’s inefficient and costly in the long term. When you’re expanding across international boundaries, the process becomes even more fraught with difficulty.
If you want to make your business an international one, then there are a number of things you’ll need to consider at the planning stage.
Researching International Markets
To begin with, you’ll need to understand the market into which you’re expanding. The better your grasp of the cultural, legal, and technical aspects of the market, the better able you’ll be to meet the challenges, and market your products and services effectively.
This is where effective market research can be invaluable. Do this in the right way, with the help of a specialist third party, and you’ll be able to determine whether your expansion is viable – and to structure it appropriately. If you already have a particular knowledge of a market, you might already know that your expansion is going to be successful – in this case, research will help you confirm your intuition, and optimise your approach.
Navigating International Tax Laws
The way that you’re taxed will vary depending on what country you’re operating in. The rules that surround tax will vary, too. To ensure that you’re compliant, you might bring in a reputable consultant specialising in international tax advice for business. You’ll need to think about VAT, tariffs, and local taxes that are particular to a given part of the world. Any oversights here impose extra costs in the long run.
Building a Strong Operational Structure Abroad
To thrive in the new territory, you’ll need to build an operational structure. This means having premises on which to conduct business, and talent to staff those premises. You’ll also need to think about supply chains. How are you going to get products from one place to the next, and how will you cope with challenges and economic shocks? The more thoroughly you’ve planned, the more easily you’ll be able to react to changing economic conditions.
Financial Planning for Long-Term Success
Expanding can be expensive. You’ll want to manage your expenses through financial planning. Think about how you’ll finance the venture, possibly through borrowing, and whether you’ll have enough liquidity to operate. A lack of cash flow can seriously harm your new expansion. Finally, it is worth thinking about the effect exchange rates might have on the business. If you’re already dealing in a particular foreign currency, then this might make it easier to expand into a country where that currency is being used.