Take Your Business Global...And Go With It!You've probably heard the benefits of taking your business global, but think running if from afar will be hard. Read on to learn why you should migrate with it.
For many business owners, the American market simply isn’t big enough for their goals, and going global is the best way to grow and expand.
If you’re considering taking your business global, you’re not alone. A survey by USForex found that:
- 58% of small businesses are already benefiting from international customers
- 72% are planning to grow their base of international customers by 2017.
- Most business owners consider themselves ready to take their business global. 96% reported that they’re confident about conducting business overseas.
Some of the Benefits of Taking Your Business Global Include:
Greater Revenue Potential
Expanding into international markets will give you access to a huge base of customers. Even if you’ve saturated your markets in the United States, you can enjoy increased revenues from new customers in other countries.
This is particularly true if your business offers products or services that are unavailable in some parts of the world. By expanding into these countries, you can make the most of a brand new base of customers without the threat of competition.
A Better Business Climate
Depending on the political environment and how it impacts your business, you may find more favorable economic conditions abroad. This is especially true during recessions and restrictive government policies.
A new country can often offer a more business-friendly economic climate, such as fewer environmental regulations, lower labor costs, or lower taxation.
Taking your business global will increase its exposure, helping you create a larger global footprint. That results in greater brand recognition, which can have a snowball effect and make it easier to expand in the future.
Access to More Talent
Many industries are competing for experienced employees. One of the biggest benefits of global expansion is the access you’ll gain to a brand new pool of talent, with unique skillsets.
These potential hires will often have skills that are difficult to find in the United States. This gives you a competitive edge over businesses that haven’t yet expanded globally.
Tips for Successful Global Expansion
While there are many benefits to global expansion, there are also some pitfalls to watch out for. Harvard Business Review studied 20,000 businesses located in 30 countries. The survey found that the companies selling overseas had an average ROA (Return on Assets) of -1%.
This lasted up to five years after the companies moved abroad, and took an average of 10 years for them to reach +1%.
As you can see, global expansion can be complicated. But by ensuring you’re well prepared you can overcome these challenges and successfully take your business global.
When you’re thinking about global expansion, you’ll need to decide which market or country will be the best fit.
Often, English-speaking countries such as Australia, New Zealand, Canada, Ireland, and the UK will generally be the easiest. Of course, you’ll need to think about the market, your target audience, local laws, fees, and whether you need a factory to develop your product.
It can be easy to assume that just because your product or service works in America it will work anywhere. But you’ll also need to have individualized marketing plans for each country and take cultural differences into account.
Whether you’re moving overseas or expanding your business into a new country, immigration can be a nightmare. One of the biggest mistakes a business owner can make is failing to get expert immigration advice.
There are many different visas that you can use to expand into Europe. The UK is an excellent example with three for entrepreneurs to choose from:
- The Prospective Entrepreneur Visa
- The Graduate Visa
- The Entrepreneur Visa
Due to increased demand, stricter immigration rules are being enforced in many countries. This is why you’ll need to speak to an expert before you take your business global.
Practice Cultural Sensitivity
Employees in different parts of the world will have different styles of communication and you’ll need to learn to respond appropriately. In Asia, for example, employees are often reluctant to give their superior bad news, and will often skirt around the issue or avoid bringing it up.
Your global expansion is more likely to be successful if you begin familiarizing yourself with the local language. This will improve communication and reduce mistakes and misunderstandings. You’ll also be likely to have a better relationship with business partners and employees.
Many cultures prefer to make small talk before jumping right into negotiations or business discussions. Be prepared to do some relationship building before you begin talking business if you want to be successful in international business meetings.
Look for a Foreign Distributor
If you find a foreign distributor for your product, you can then sell them your stock and trust them with reselling it in their markets. This is an ideal situation, particularly if you’re considering expanding into markets with different languages, laws, and cultures.
Some tips for finding a foreign distributor include:
- Check your home state or city
- Explore foreign chambers of commerce and trade groups
- Speak with an international business consultant
- Consider if you need a stocking or nonstocking distributor
- Decide whether your salespeople will need to be knowledgeable about the product
- Look for a distributor with a successful track record
Speak to the Experts
It can be difficult to navigate the different business regulations and tax codes between American states, so consider this when moving into a foreign market.
The United States taxes all worldwide income, and you’ll also need to be up to speed on the reporting requirements imposed by the IRS.
Foreign banks will also sometimes be hesitant to deal with bank accounts based in the United States. You may need to set up a foreign bank account and business entity to make handling transactions easier.
Some countries will also have different packaging and labeling standards. In Europe, your product instructions may need to be in up to 24 languages.
It’s crucial that you do your due diligence and speak to experts in immigration, taxation, international business, and law. This will make it more likely that your global expansion will be a success.
Need immigration advice? Get in touch today to learn how we can help.