10 Tips to take your Business Global
Global business expansion might sound complicated, time consuming and costly, however in the 21st century instant and extremely affordable communication have made geographical barriers irrelevant. This has resulted in most businesses to desire regardless of their size, the need to expand globally without taking the additional risks that they would have had to take in the past. Big giants like Amazon, Alibaba, Ebay etc. after targeting a global audience on a single online platform, have proven in front of the whole world that a geographical piece of land on which your business exists, should not be used as an excuse to confine your business to a limited audience or market.
From cultural and language barriers to understanding potential markets and generating sales, there is a lot to consider when businesses think about going global. The ways to expand and scale your business globally will depend somewhat on the nature of the services or the type of product that you provide, but here is the good news, businesses can utilize resources that are available in their daily operational use and can successfully reap the benefits of globalization by taking into account the points below:
Research ,Research and more Research, before you go global
A clever student never gives an exam without sufficient preparation, similarly, a passionate businessman will never enter a new market without a plan of action.
Targeting global markets is a complicated process, you need to have enough information about your target market, the barriers to entry and the key competitors your business faces before deciding on how to enter the market.
The advice for businesses focusing on global expansion is that they should target unsaturated markets or markets where their products or services are deemed unique. Try using a PESTEL analysis to analyse a market you are thinking about expanding into, for determining barriers to entry you could utilise porter’s five forces. There are many other tools you can utilise to devise an effective plan of action.
Identify the Business Structure and Global Hierarchical Control Structure
A business needs to select the correct business structure for long term scalability and to avoid unnecessary risks when opening shop in an overseas location. You also need an effective global structure to retain proper flow of data and decision making.
Once a global structure has been identified you will have setup the chain of command, the flow of decision making within the organisation and regional and global support centres. Hiring can also be a huge struggle if the market you are expanding into is not similar to yours, understanding employee rights, pay packages and working environments can get complex, therefore, you need to ensure you put in place the right management team who can help you hire, setup working practices and successfully implement your strategies. You must be aware of all the legal practices and requirements.
Build a Global Setup from the very Beginning
Whilst the majority of new businesses limit the functionality and scope of their services and products to their domestic market when starting operations, it would be considered a wise decision to build your business’s global functionality from the very start. A competitive Business Adviser should be able to help with this.
For instance, while designing the website of your business, consideration should be made on the languages that are available to view the content that helps users navigate on your website
,and how these languages will affect the layout of your website. A word in one language might have less characters as compared to the language it is translated into, this can result into space errors, hence affecting the layout of your website.
Utilize Effective Tools
Whether you are a small or medium sized business owner, you must have the right tools
in-hand to grow and manage your business operations abroad. Globalization may sound very costly due to the infrastructural changes it requires, but by utilizing cost-effective tools and methods, you can potentially make the process easier and far less costly than what you imagine.
For instance, businesses can always seek services from third-parties for making and receiving business payments. Stripe, PayPal and WorldPay are some of the very popular and
cost-effective online payment systems which businesses can use for their daily transactions globally.
Another tool that might be helpful in identifying a potential market, is Google Analytics. With the help of Google Analytics, you can easily recognize the region or area from where the majority of traffic is coming to your website. You may then plan your operations after cross-referencing the data with your sales data to identify the most profitable markets, and move your business to the region that is near those profitable markets.
Language is of the Utmost Importance, Learn It
It is without any doubt that language is often the biggest challenge that businesses encounter whilst managing their operations overseas. English might be one of the most spoken languages in the world but it is definitely not the only language spoken. Customers worldwide will be more comfortable to buy products and services that are presented in their native, local or national language.
You can hire bilingual staff members or translators in your company, but if hiring seems unaffordable, you can always outsource these overseas customer service tasks to native speakers or translators.
Learn about the Culture
There is more to consider than just simply focusing on the language, global expansions require businesses to understand the culture of the place they plan to begin their operations in. Demand of products and services may vary from country to country, what is deemed as acceptable in many countries might be deemed as unacceptable or offensive in other countries. Without knowing anything about the culture in your target country, your business might just offer unacceptable products and services that may put-off customers from your products.
Visit the countries you plan on expanding into, before you even begin. Meet potential suppliers, customers and staff to understand their expectations, the way of their working and the key things to consider. Only after understanding the business culture in a destination will you be able to make business decisions which are relevant and correct.
Other ways you can get familiar with the culture is by interacting with locals and expats living in that country, attending local events, and travelling across that country on your own.
Build the Right Team and Partners
If you are planning to expand your business globally, it is advisable to have someone along this business journey with you, a partner maybe, who can be trusted and can act as a mentor in the time of need or crisis. Some businesses find a partner in the destination where they are thinking of expanding into, a local preferably. They do this by means of joint ventures, franchising or acquisitions, smaller businesses tend to do this by mutual agreements or profit sharing.
It Is very important to build the right team at the very start, a team that understands the market and language of the new country, so that they assist you in staying compliant with local regulations whilst carrying out daily business activities.
You may hire a local accountant or speak to a competitive accounting firm to ensure that your business is compliant with the regulations in the new markets and to efficiently manage your expenses. A local accountant on board can help business owners get familiar with the tax system of the new country and can help you save money by identifying and updating you on the potential tax reliefs.
Keep in mind that the person you hire to deal with business partners and customers overseas initially, should be well immersed in the local culture and environment. Along with that, find someone who is going to be looking out for your interests.
Plan and utilize your resources carefully
Business entrepreneurs who are motivated enough to pursue their dream opportunities, somehow lose motivation and confidence when they take their business global. This can be due to the lack of resources and the failure to plan before hand, for instance, a business shipping to their expansion destination faces delays due to their freight company’s negligence, they have no other alternative to resume the shipping, as a result, these entrepreneurs are at risk of losing customers before even providing the service to them. You can look at things like business continuity insurance, shipping insurance etc to cover yourself.
Taking your business global requires thorough planning for all possible uncertainties and requires finding solutions before hand, in order to prevent little problems from becoming catastrophes.
Pay Attention to your Business’s Compliance and Paperwork
Every country has its own system and regulations, taking your business global will require you to stay compliant with government laws and regulations. A lot of paperwork is required to be done before you can fully operate overseas.
Set up a system in your organization, that allows easy tracking of all the relevant contracts, forms and correspondence, so that you may easily access and gather all of the necessary documents whenever required.
Getting to know different tax codes, company regulations and packaging standards in different countries is essential but can turn out to be very challenging. You may hire a competitive accountant to keep up with the financial and tax paperwork whilst you focus on primary tasks of your firm and a suitable freight company for your complex shipping needs.
There will be a lot of obstacles in the beginning, for instance, you may face troubles in providing services in your new market, or you may face problems in providing appropriate content to your new target market.
Be sure to learn from all the positive and negative feedback you receive from customers instead of being disheartened by it. Feedback from local customers should be considered extremely valuable as your are getting first-hand information that can be utilized for your business growth and can help you get ahead of the competition.
The most important thing every business entrepreneur should keep in mind is that success doesn’t come overnight, it requires painstaking efforts, persistence and consistency to take your business global. Whilst you may encounter numerous challenges in the beginning, with persistence and hard work you should be able to face them all. All the best!
Thao Le is a Senior Accounting Manager at Clear House Accountants. Having worked and grown in the industry for a number of years she is now responsible for a team of accountants, tax planners and bookkeepers, working with them to help clients from a variety of industries, grow, save money and plan for the future. Thao holds a Bachelor and Masters degree in Accounting and Finance and is currently working towards her ACCA, she is also a Xero and Quickbooks Certified Advisor.