It’s the dream of many business people to leave a mark on markets far from where their businesses began. After all, you can only grow so much domestically before you hit a ceiling and there is nowhere left to go. The only way to go is up, but that’s eventually only possible when scaling your business to an international level.
Expanding your business internationally doesn’t come with a guidebook. However, there are countless examples of businesses that have both succeeded and failed at doing so. Follow along as we highlight essential things to consider when scaling your business internationally.
Consider Your Approach
Your approach when scaling your business to an international level has a lot to do with what you want to achieve. For example, you can simultaneously expand your business into several different countries at once, but that carries risks. This is a huge financial investment, and there’s no guarantee of a quick return.
You can minimize risks if you start slowly and initially test your international business presence in a single country. That way, you have data that reflects your business’s international performance before you further expand your reach. Aggressive expansion is always an option, but the financial implications are hard for many businesses to justify.
However, it’s relatively easy for a business to justify expanding into a nearby country, like Mexico, before going global. You can use this performance data to right your wrongs and scale your business accordingly. Weigh the pros and cons of several integration strategies before you invest in one.
Research New Markets
You cannot simply expand into a new market without first researching it extensively. Ideally, you should start by narrowing things down to 2 to 5 markets you want to pursue. Research similar businesses in these markets and check the performance data.
Using these sales figures, you can approximate what to expect when scaling your business within this market. However, you shouldn’t strictly research the current market conditions. Instead, carefully research the market conditions and sales figures over many years.
After all, you don’t want to enter a seemingly prosperous market right before the local economy takes a dip. Past sales figures and market research can say a lot about upcoming trends. Pay close attention to import and export data and trade statistics.
Enlist Local Help
Sales figures and market trends can only do so much to inform your approach to international expansion. You would be remiss not to hire locals with experience to help scale your business overseas. First, it’s a great idea to help local consultants to provide ideas and valuable insight.
From there, it’s worth hiring locals for important positions in your international branches. Not only is it the right thing to do, but they can also show future international employees that you respect their culture. Make sure to maintain a strong line of communication between your international and domestic teams.
Ideally, you should hire department heads for your international locations who are fluent in English. This can help your team avoid communication gaps that would otherwise hinder growth. Otherwise, you can make use of translators who understand your business goals.
Familiarize Yourself With Local Laws and Regulations
Business, labor, and trade regulations differ between countries. The last thing you want is to unknowingly violate laws and regulations in another country and get slapped with fines. Not only does this result in penalties, but it can also tarnish your business’s international reputation.
That’s why it’s essential to hire local consultants and lawyers to understand and identify local regulations. This can inform how you appoint employee statuses and work schedules. For example, some countries have different definitions of contractors versus full-time employees.
Simple mistakes like misclassifying employees can set your business back and slow expansion down. Maintain communication between your domestic and foreign legal teams and consultants.
Reassess Logistics
You must reassess your approach to logistics when scaling your business to an international level. That’s especially true if you have limited export experience or no experience whatsoever. International business expansion means that you must consider time zones, tariffs, and duties.
This affects both your timeline and your financial overhead. For example, you must adjust your budget to reflect transportation and export costs. You must also adjust your schedule to ensure your exports arrive on time, accounting for customs delays and time changes.
Make the Most of Your International Expansion
Expanding into international markets is equally intimidating and rewarding. Don’t let the prospect of extra work, investments, and stress keep you from making the most of your international expansion. This is your chance to grow your business to the titan of industry it deserves to be. Once you expand your team and create a plan, it’s simply a matter of staying steadfast and trusting your instincts.
