For a thriving business, expanding your business internationally is a natural next step. New countries present new opportunities for growth, and an opportunity to steal a march on rivals who may be slower to expand. But while stepping onto the global stage is an exciting prospect, the plan that got you this far may not work without significant adaptation.
Different countries represent different business environments, each with their own unique challenges. This is where our experience comes in, having helped countless entrepreneurs to navigate the transition to another country, and given them a platform to thrive. Here’s what to consider when expanding your business internationally—from studious market research to building a team with local expertise.
Research your chosen market
Before you set up shop in a new country, it's vital to understand the specific landscape of the market you’re entering. This may be obvious, but the depth of research required to build a complete picture of a market may not be. What many successful business owners don’t realise is how much of their knowledge of their domestic market is intuitive. When entering a new market, you need to think about things that may never even have occurred to you locally, as well as factors that simply aren’t relevant back home.
The obvious first port of call is assessing the demand for your product or service in that country. Data by companies such as Statista and reports by companies like PwC can give you top level insights, but more direct market research is advisable. Targeted surveys and country visits should help you identify your prospective customers’ needs, preferences, and buying habits, and figure out how entrenched your competitors are.
Related article: How to start a business in France in 8 steps
Cultural differences should also be a major consideration. There are obvious ones - you wouldn’t sell beef products in India, for instance - but some are much more nuanced. Some countries have an inherent preference for local companies, so may put you at a disadvantage if the market is already competitive. The name of your business or products may not translate well, or your approach to marketing and brand voice might be seen as offensive or crass.
Understanding the regulatory landscape and legal requirements for your industry is also a crucial bit of due diligence. There may be restrictions on your industry that make expansion to a particular country cost-prohibitive, or even restrictions on bringing in the talent you may need for your particular niche. Using a company formation specialist can help to connect you with local legal experts, ensuring compliance with all local regulations and tax laws.
Building an international team
Building a strong team is essential for success in any market, but it takes on added importance when expanding internationally. One aspect is your target country's access to talent, and how this will impact your ability to operate effectively. The presence of universities and other educational facilities locally may give you an indication, as will checking local job listings. Visa laws and potential language barriers should also be considered, as any miscommunication in the sensitive early stages of an expansion can be costly.
Cultural competency is another key aspect of building your international team. A team that understands the local culture will be better equipped to navigate business relationships, develop effective marketing strategies, and interact with customers. Such business relationships can be key to winning trust locally, and evidencing your investment in and understanding of the country. At the very least, having someone local cross-check your marketing and other communications will help you avoid obvious faux pas.
Financial considerations
The financial implications of international expansion also require careful planning. While you should have a plan for expanding that includes your financial outlook, it’s important to explore all the funding options available in your new market. If you’re expanding to mainland Europe from the UK or United States, for instance, you may be able to benefit from EU grants or incentive programmes, as well as ones specific to that country. Many markets offer visa programmes, R&D funding and tax breaks to encourage creative and innovative businesses to relocate, something you can take advantage of.
Related article: Why you should be setting up a business in Ireland
The stability of the local currency is also important to note, as any currency fluctuations can have a significant impact on your bottom line. Consider the general economic outlook for the country you’re entering, and whether this may impact your business, such as a particularly low level of consumer spending as a result of a high cost-of-living. Hedging your foreign currency exposure or setting up local bank accounts can help you manage these risks—and it’s even possible that the new currency could be in a better position than your native one.
Logistics & operational efficiency
Adapting your supply chain and distribution network to a new market is also essential if your new business is going to operate efficiently. If you’re a UK business, imagine yourself expanding to the UK from Europe, and having to deal with all of the issues you’ve faced since Brexit! Try to consider factors like the regulations around imports and exports, transport and logistics infrastructure, and the physical distance between your production facilities and your new target market. These factors will influence your shipping costs, delivery times, and other operational expenditure.
We’ve mentioned it in brief before, but developing a localised marketing strategy is also paramount for reaching your target audience. This means going beyond simply translating your existing marketing materials, and into a consideration of the cultural nuances of communication in your target country. The things that make your product or service great will normally translate, but the way you communicate them - the humour, imagery, and even colour schemes you use - can be interpreted differently in different cultures. Local marketing staff or cross-checking by local staff can help to generate ideas, and avoid these pitfalls.
Beyond the basics
Beyond the immediate considerations of market research, staffing, and finance, there are a few other things to keep in mind. An increasingly relevant factor for modern businesses is the technological infrastructure of the country you’re expanding to. The provision of fibre-to-the-premises is increasingly necessary, as a slow or unreliable connection can prevent you from making phone calls and video calls, as well as slowing down uploads or downloads of large files.
Related article: Guide to doing business in Europe
Another factor that may seem obvious but can easily be missed is assessing the political climate of your target country. Political instability can pose risks to your business, while certain political parties may have ambitions to legislate against your industry, foreign businesses as a whole, or the funding and visas that such businesses often rely on. Understanding the political landscape will help you make more informed decisions about your investment, and ensure the long-term viability of your plans to expand.
Taking the next step
Expanding internationally can be a transformative experience for your business, opening doors to new markets and unlocking significant potential for growth. By carefully considering these factors—and partnering with company formation specialists—you can navigate the complexities of global expansion and achieve long-term success.
For more information you can download our free guides on how to open a business in France, Ireland and Europe. We offer a wealth of experience and resources to help you establish your business in more than 30 countries around the world. Contact us today to discuss your international expansion project, and how we can help you to successfully establish your business abroad.
