Planning to grow your business out of the local region and target international markets?
After all, global expansion often begins with a grand vision of conquering the international market. However, only a few can find success in this venture. Still, if you're interested in setting up a business in one of the best countries for a global business or even in other countries, it may be time to pursue this vision.
If you're looking to build a global presence, though, you must first have a solid international expansion strategy. This will allow you to understand all the complications of foreign business dealings.
How do you then develop a strategy that will work in another country? Read our tips below to increase your chances of finding success in foreign soil.
Do Some Market Research
By this point, you might already have a country (or more) that you're eyeing. In that case, the next step is to understand this country before you develop your strategy.
Learn About Their Culture
Entering foreign markets is always risky in that they have a different culture than in your home country. That means that your business strategy will most likely not work if you don't adapt it to their culture.
Learning about their culture and languages can help you find out how you can enter the market and distribute your product.
For example, a direct translation of the name of one of your product might be something offensive. Learning about these things will allow you to make some changes where you see fit.
Know How Your Product Will Fit
This may be the most important consideration in opening companies in foreign shores. You should first know if your product will sell and if the market is already familiar with it.
If, for example, you're planning to put up branches of your fast food chain in another country, you have to consider if the people there will like it. You'll usually have to change the ingredients to make them more suitable to their palate. You may also have to add or omit some menu items altogether.
The target market's familiarity with the product or service matters as well. This will dictate if you have to make a heavy investment in consumer education. The exciting thing about this is that you can be the first to introduce a concept.
If you play your cards right, you can be the pioneer in a soon-to-be booming industry overseas.
Study the Laws and Regulations in the Country
Next, you should know how to go about opening a business in another country. Study their laws about a foreign entity opening businesses on their soil.
Furthermore, find out any regulations concerning your product and make sure that you're in compliance with all of them. For example, the government there might have banned an ingredient in your product. How will you then localize it and make sure that you're not breaking any rules?
Another set of regulations you need to be aware of covers the labeling of your product. You'll have to design a new label anyway, so might as well make sure that it complies to the country's regulations.
Get Your Taxes in Order
Another thing to note about a country's laws and regulations is their taxes. Not only will you need to study their tax regulations, but you also need to find out how you can comply. For example, you might need to set up another business entity to handle that front.
At the same time, you must adhere to the tax regulations in your home country. This will further complicate the tax matters. You might consider outsourcing the accounting and bookkeeping tasks to foreign businesses instead.
Develop a Tailored International Expansion Strategy
Now that you have a deep understanding of the market(s) you're entering, it's time to develop your strategy. Aside from the usual important stuff of understanding your needs and goals, preparing your budget, and evaluating your pricing model, you'll have to pay more attention to the 2 factors below.
Plan Your Distribution Method
You might have already set up a feasible and efficient distribution method in your home country, but will it work in a foreign country?
The good news is that you have plenty of distribution means overseas. You may choose to open company-owned foreign subsidiaries or you may partner with a distributor to market and sell your product.
In any case, you also have to plan how you can get the product to them using the most efficient method.
Consider the Invoicing and Money Transfers
Opening a business abroad always means you're going to have foreign partners. These could be suppliers, vendors, or clients. This also means that you're going to have to issue invoices and make or accept payments from overseas
There are a lot of considerations here, such as money transfer methods. Then there are IBAN and SWIFT codes, which you should already be familiar with. If not, feel free to check it out here.
Build a Relationship with Your Business Partners
Most successful CEOs and business owners know that the key to a good business relationship is trust, and one of the key factors of building trust is to have a decent relationship outside the business matters.
We're not saying you need to be friends, but make some small talk before business discussions. Get to know your partner first and be sure to be respectful in the way you dress up, in tone, and in your body language.
If you were diligent in researching their culture, you can take down any cultural barrier. On that note, make sure to bring your own interpreter if your partner speaks a different language.
An interpreter that they will provide might have their own interest. On the other hand, an interpreter of your own will give you accurate translations.
Knowledge is Power, Learn More About Businesses
Studying about business dealings abroad doesn't stop with a successful international expansion strategy.
You must keep learning and adapting to any change in your industry.
If you want to learn more about businesses in general, make sure to visit our blog today. Learn everything from having a top-notch website to building a global company.
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