Starting a business is no easy feat, and running that business successfully enough to warrant business growth is a huge accomplishment. Once you’ve established your business at home, it may seem like the next logical step is to expand overseas. While this can present numerous exciting opportunities, you could also be compounding your risk factor. The many moving parts of a local business only grow when you move overseas, and if you don’t know the market or how to run a business within a new socioeconomic climate, your significant investment could be in big trouble. If you think expanding overseas is the right next step for your company, here are four tips to get you started.
Successful expansion is the result of successful research. Research is essential to any kind of business growth, but doubly so when entering a foreign market. Make sure your business could survive if everything goes poorly. A failed overseas expansion could be a massive loss of resources. You’re looking at hiring new employees, paying potentially higher fees, and taking on the enormous task of introducing foreign workers to your company’s unique culture and ideals. Business expenses aside, you should consider the cost of living for your employees, or yourself if you plan on relocating. Visas, flights, and accommodation all add up.
Before you can decide on where to expand, you need to find viable markets. See where companies similar to yours have thrived and which have failed. Once you find a place for yourself, be prepared to start a small operation to test the waters. Studies show that 72 percent of people who conduct a local search will visit a store within a five mile proximity. Leverage local marketing so that you are discoverable to potential customers in your new location. This will give you a better chance of success within your new market. Testing the waters can give you a feel for how a more extensive operation would work, but with lower risks. Assess how this operation performs, then come up with a revised business plan.
Find a Consultant
While a consultant may seem like just another fee, the right consultant could save you from making huge mistakes in the long run. Consultants can make the transition go more smoothly and effectively than if you’d tried to manage on your own, and they may have information on some aspects you weren’t even aware of. The right consultant can provide you with a thorough analysis of the market as well as help you find the right property, contracts with reputable contractors and employee benefits. This can also come in handy if you have a lot of responsibilities in the day-to-day business operations and can’t spare long periods of time to gather all the information you need.
Since overseas expansion can get expensive, this isn’t a venture you should jump on without taking the time to budget. Give yourself a reasonable timeframe to prepare so that there’s less pressure when the time comes to get things in motion. The visa application process alone could take months longer than expected. When operating overseas, you need to account for heightened delivery costs, exchanging currency, and all the added fees for customs and taxes. Daily operations at your new place of business are unlikely to cost the same as you’re used to paying, and the cost of production for your products could surprise you as well.
That being said, you shouldn’t necessarily spend everything you can. Saving money and budgeting correctly can still save you a lot of money. For example, if your business is small and doesn’t have much employees, you can always take advantage of not having a physical office to worry about. You could use BYOD policies and telecommuting to handle what you need to get done. Additionally, you could also see what the options are for a virtual office in the area, as they can be advantageous for tax deductions, among other reasons.
Target the Business and Finance Hubs
In some cases, it might seem counter-intuitive to launch a new business operation in a crowded market, but expanding into business hubs could be one of the smartest decisions you make through this entire process. Not only do these hubs easily connect you to the rest of the world, but they also have many unique benefits to offer. For example, setting up shop in Hong Kong is shockingly cheap and can be completed within a short amount of time with little difficulty. London is a melting pot of cultures and skills, and while it may seem expensive to live there, you can enjoy some tax relief and easily attained entrepreneur visas. Paris has a culture with great work-life balance, and the German government is friendly towards new businesses, making it easy to find new workers.
Expanding overseas presents a huge opportunity, and the decision shouldn’t be made lightly. There could be many obstacles waiting for you, whether it’s an inadequate location, visa issues, or high operating costs. Jumping in without enough research and planning could set you up for a difficult road, but you shouldn’t be afraid of this big step just because of the planning and finances involved. With a solid plan, budget, consultant, and prime location, you could enjoy the next stage of your business.
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