Small business owners can now scale their business internationally due to technology and the popularity of online shopping. Many hurdles have been eliminated from turning your business into a global phenomenon. In recent times, many businesses have made a global impact because they have started shipping online or hired employees from around the world.
The impact of the pandemic cannot be ignored as well. Many businesses have pivoted towards hybrid and remote job opportunities for candidates around the world. This has also decreased the cost of running a business, the impact of a toxic work environment on productivity as most employees work from home, and improved the potential target market for them. However, running an international operation comes with its fair share of complications.
Here are a few things business owners who want to go global need to think about.
#1: Figure Out Financials
Turning your business into an international one may sound lucrative but it comes at a cost. Calculating the cost of expanding your operation is the first thing that you need to do. Increasing your business foothold to other countries cannot come without taking local people on board. Even if you are running a remote operation, you may require a local office or a warehouse to ship items from. So, you need to factor in the additional cost of hiring new employees, renting a space, personal commute expenses, custom duties, local taxes, and so much more.
So, expansion to new lands may bring in a fresh market, and more customers, but you need to figure out whether your business can afford that or not? If you think the investment and ROI are worth it, only then should you think of going international.
#2: Logistical Feasibility
Expanding a business, even locally, needs a fair bit of planning and proper execution. You can’t jump into it without thinking it through properly. After carefully thinking about the financials, you also have to consider the logistics of the entire operation. If you are going to stay in the parent country, you will probably need a country manager for the expansion. The right office space and hiring strategies for localized resources also need to be put in place. Moreover, you also need to examine the day-to-day operations depending on the type of business you are in.
For example, if you sell services online, you have to think of shipping costs and partners for local deliveries. The local laws may prevent you from doing things the same way. So, you may have to chalk out new policies or announce a change in SOPs.
#3: Market Analysis
No two markets can be the same. So, before you move your business into a completely new market, you have to analyze it thoroughly. Market analysis means an investigation of your current potential and target audience, your competitors, and the state of the economy. A great analytic tool for new businesses can be a SWOT analysis. It can help you determine what your strengths are so that you can expand by building on them. Moreover, a market analysis can also help you determine the correct price point for your products and services. It can also give you a clearer picture of offering a market-competitive salary to your employees.
#4: Run a Test Case
Moving your entire business to another country might not be the best idea. No matter how much research you think you have done, the ground realities can be a lot different. Many logistical and financial difficulties may not even show up before you land in the country and start operations. Therefore, for successfully scaling your business, you should run a test case for one or two of your most popular products or services.
Not only can that save a lot of money and resources, it can also be a major learning curve. Slowly expanding your business foothold also means that you can pull out at any given moment without a lot of financial loss. Going all in and then things not working out can have massive financial implications.
#5: Learn Local Laws, Taxes, and Culture
Every new country you step into will have new laws for customs, taxation, and border mobility. Moreover, each country can also have different cultural acceptability of various things. You cannot expect everything to be the same. So, you may have to adjust how you deal with customers and develop a strong understanding of the country’s culture. For example, your local resources may consider the importance of employee motivation strategies above all else when choosing an employer, they may expect a better salary plan, gender pay gap could be a major issue, there may be lesser women in the workforce, harassment laws could be different, etc. So, before you step into the market, do some research and learn more about the workplace culture and social fiber of the country.
