You may already be in business overseas and looking to upgrade and expand to new countries, or perhaps you have a successful domestic business and consumer base, and you are interested in getting into foreign markets. Or maybe you have a start up company that will need overseas customers to be successful. Regardless of what your plans are, you should consider the following points that could have an impact on the way your company works. Here are 5 tips to starting or expanding your business in a new country or foreign market.
1. Keep in Mind Language and Culture
This consideration could create big problems or not be a problem at all depending on the country you're targeting. As an example, a UK business looking to grow in United States not have a lot of concerns about changing for the culture other than some spelling differences in marketing collateral and possibly some negotiation tactics that wouldn't make sense in the United States. Otherwise, the transition is fairly simple. But if your business is expanding to China after inception in the US, the problem is trickier. Your team will need to keep in mind cultural differences in making deals, as well as translate policies and advertising collateral to reach a Chinese consumer base. Talk to a translator or specialist in the culture to help with this process.
2. Educate Yourself in the Country's Legal System
Between countries, legal systems can have some big differences. A simple difference in tax rates, which are highly variable around the world, can have a big impact on your company's structure. A large, complicated difference like intellectual property law can be pose bigger problems; some countries barely recognize intellectural property, while others, like the United States, have heavy protections on IP. Talk to an international law attorney and a financial planner in the country you're looking to work in to make sure that you don't get caught flat-footed due to a misunderstanding of the law.
3. Understand Currency and Import/Export Law
Planning for changes in currency exchange rates should be an important consideration in your expansion plans. One country may be in a depression while another country is experiencing growth - these differences can make an impact on your bottom line. Prepare yourself by speaking with a financial planner so that you can build some cushion into your margins in case of an economic change, and be ready to leave the market if the worst happens.
On top of this, trade rules, sanctions, tariffs, and other laws can have an effect on your business' operations. Importing a car to the United States from overseas is one example of this. As part of this import, you must consider safety mandates, environmental standards for the vehicle, taxes, duties and more, all of which may have an impact on whether you can actually import the vehicle. Similar types of decisions are made when you set up a business overseas.
4. Office Locations
A physical office isn't totally necessary, but purchasing or leasing some office space can be helpful. Doing so will allow you to be listed in directories and join local business guilds, not to mention the personal connection with local consumers and partners. An office space is at least worth consideration.
5. Don't Rush
With any major financial decision, taking your time pays off. It's helpful to be optimistic, but also realistic; your business will need time to grow. With careful planning and execution, you can be successful in international business.