5 Top Considerations to Make Before Expanding Internationally
You may feel as though you have reached the height of your customer base, or you may be seeing decreased returns from your business in your country. Therefore, expanding internationally could be a great way to kick-start your growth again and make everything easier.
Foreign markets are often under-served but still benefit from increasing disposable income, making them attractive for a business looking to expand. This is especially true in emerging markets, such as Asia, Russia, and South America. If you can tap into this pool of unexploited customer demand, you can find a fantastic opportunity to expand your business.
Foreign countries can also offer your business many savings through lower materials, staffing, and manufacturing costs. There may also be tax benefits to working in different countries, such as act 60 tax incentives in Puerto Rico.
If you decide to go global with your business, you can diversify risks more than you could if you only operated in one area. Despite a recession and low demand in your home country, your international business may still thrive and grow.
However, you do need to remember that this is not going to be a simple process. Turning your attention to international expansion can come with substantial setup fees and ongoing fixed and variable costs.
You will also need to understand the foreign market that you are planning on targeting with your business. You should never decide to start exporting into different countries on a whim.
Be sure to plan and do lots of research before making any firm decisions. You should be cautious about allowing your plans for exporting to distract you from your core local business.
What Are The Key Markets For International Growth?
The key target markets for international growth are the emerging markets that still have low market penetration. These market shares have a high level of untapped consumer demand, which could be very beneficial to you. In such places, wages and living costs are usually lower, and there is already progress towards improving the infrastructure.
In almost every sector, the current best option for international growth in China. China has a huge population. Western brands and luxury goods have only been introduced to China relatively recently.
When you pair this with the large labor case, the potential for growth in China is very high. Making it an attractive option for business owners.
Other key markets for international growth include other BRIC countries, Brazil, Russia, and India. Other emerging markets could be a good choice, too, including Turkey, Mexico, Indonesia, and Vietnam.
These markets are some of the fastest-growing and the most dynamic economies in which to grow internationally. First, however, you must have a good understanding of what your niche is in each of these markets. There can be some very substantial differences between the different markets.
It can make doing business quite difficult if you aren’t prepared. So make sure you know your niche and be wise enough to focus only on the markets you. Or have someone you work with have a good understanding of.
Which Businesses Are More Successful In International Markets?
The most successful businesses in international markets won’t be surprised, including huge household name companies like Apple, Google, Coca-Cola, and Amazon. Companies have reached global success in different ways. What they all have in common is a simple, recognizable, and translatable brand. In addition, all of them have worked hard to cultivate customer loyalty worldwide, and they have all been able to find effective ways to make the business model successful across international borders.
Businesses that can find success international are the ones that have put a lot of time into identifying gaps in the market and different potential opportunities for them around the world. Having a scalable or exportable business model allows them to expand more easily.
For example, the advertising model of Google is infinitely scalable without the need for very much modification. Another thing, Coca-Cola has had to invest in production and distribution infrastructure seriously. In different countries, in different time zones, around the world.
Where Can I Get Support For Growing My Business Internationally?
If you have decided that expanding into international exports is the right move for your business, look into whether your home country has a government agency to offer you some help and advice. Many countries do, so it’s well worth exploring this option.
For example, in the UK, UK Trade and Investment produce a range of material for guidance that contains all kinds of helpful information about trading in different countries worldwide. It also runs a selection of seminars and workshops and can provide you with face-to-face meetings with a specialist advisor.
If you’re based in the UK, you can also get government financial support via UK Export Finance. If you’re not in the UK, see what your country offers and what support is available to you as a business owner.
It is also a good idea to approach some different trade organizations in your sector to seek out more advice. If you are expanding overseas, seek legal advice from a specialist law firm, as this firm may also be able to provide you with support and advice.
How Do I Merge My Business With A Foreign Business?
Merging two businesses involves having to pool your assets and resources into one combined legal entity. You can achieve this in different ways, such as one of the businesses purchasing the other. If this happens, this is technically an acquisition rather than a merger, but in practice, most friendly acquisitions are considered mergers.
You must take several practical steps. It includes negotiation about ownership stakes in the merged business and securing efficiencies from eliminating duplicated work.
The process of doing this is pretty much the same for an international merger. Still, you will have to consider many different rules and regulations of both your country and the country of the business you plan to merge with. In addition, cross-border mergers can be very complicated and complex, time-consuming, and expensive. So before you start the process, make sure you have a clear business case for carrying out the merger.
You will need to select one of the countries for the incorporation of the combined businesses. You should choose a country based on the best tax rates or other practical considerations. Some countries have much stricter restrictions on business ownership, which could make a difference to you and your investors, so research first.
You will have to think about whether or not you will keep the structures of the original small businesses intact as subsidiaries. Expert advice from an international business lawyer is always a good idea.
When Should I Start Exporting My Product Or Service To International Markets?
Before exporting internationally, make sure that you have a firm, stable business model established at home. Have you fully exploited your domestic market?
Research the possible international markets to find where there is customer demand. Could your business model be adapted to the market of your target country? Remember that there can be a big difference in price, income, and regulation that you must consider when deciding whether you can make a profit somewhere else.
Before you make the final decision to export, consider whether a different approach might be better. For example, would it be better to contract a foreign manufacturer to make your products, to save time and money on international shipping?
Identify the opportunities for global expansion. A major competitive advantage of international expansion is likely to be new sales. The best prospects are countries or regions where your product or service has not already penetrated but where there are many prospects for growth. Ensure the local population can afford your product and check what local laws or regulations you will need to follow.
Prepare your business model for a global market. The simplest option is to export your product, but a local manufacturer or franchising your brand might be a better fit for your business. Next, plan and invest in a marketing strategy. Marketing in a different culture can be a challenge, so local help is smart to make sure your message gets across.
Expanding internationally can be an exciting time for your company. You may already find yourself operating in several countries and looking to expand further. You may have to decide with little notice due to a competitor moving into your country or region. Either way, there are a few things you should consider before stepping foot into your potential new market.