7 Things To Consider Before Expanding Your Business Overseas
It would be the dream of every entrepreneur to expand their business overseas. It can be so enthralling to talk about the office in ‘New York’ or ‘Italy’. But going global is not everyone’s cup of tea. You need to consider various aspects before expanding overseas. One small mistake can cost a lot to the company and can ruin the entire setup. Hence, proper strategic planning must be done before stepping into the foreign market.
The article deals with the 7 important things that you need to consider before embarking your journey towards the direction of Going Global.
1. Know your Company:
Expanding business overseas can seem to be very lucrative in terms of rocketing the sales and profit but it is a very complicated task. The first thing you need to check is to know whether your company is ready for overseas expansion. You should be well prepared for the expansion and be well equipped to execute the plan. Prepare the detailed budget as expanding abroad has a lot of expected and expected cost attached to it. Your company should have ample funds to tackle the financial needs.
2. Staff and Resources:
Going overseas can prove to be lethal for your company if you do not have resources to tackle your overseas affairs. Firstly, you need to check the accessibility of man power that you would need while going global. During the phase of establishment you will need your human force to deal with the external affairs and for the time of crisis. Make sure you have a dedicated team, newly designed website, and other marketing collateral like fyler, printed poster to support your expansion and make is a hassle free process for you. And this should definitely not hamper your business in the host country. Before going global make it a point that you have sufficient people that can take care of your local market as well as people who are potent to handle your expansion.
3. Identify the Market:
After you have checked regarding the feasibility of expansion the prime task is to identify the market that would like to avail your products or services. Select a market that has similarity with your local market so it becomes easy to sell your product. Try to understand the culture of the country and make sure that your product/service should be a cultural fit; it should be accepted by people. Enter into the market that has demand for your product and consumers have the purchasing power.
4. Identify the needs of Customer:
If you are planning to go global you should be competent enough to carter the need of your global customers. The needs of the customers might vary as per the country’s culture and geography. You should make all the efforts to know the requirements of the customers; do extensive research and even try to interact with the local customers to know their needs. You should be ready and competent to make modifications in your product/service to meet the wants of users.
5. Decide the Entry Mode:
Your Company can go global via various modes like through exporting, importing or even joint ventures. As per the industry you need to decide which entry mode to opt for in order to overcome the barriers. It is advisable to enter through the joint ventures in order to avoid risks. However, it is very crucial to choose the right partner as amalgamation with the wrong partner can prove to be fatal. So you should be wise to make the right move as the future of your country depends on it.
6. Know About the Legal Policies:
Before finalizing the country for expansion it is pivotal to understand the legal policies of the country in order to avoid any future financial constraints. The hiring and labor policies are very stringent in some countries so it is better to know them before plunging in the market. Make yourself aware about the legal compliance policies about the industry to minimize the commercial risks. Having the proper knowledge regarding the tax as well as export policies can prove to be very fruitful for your company.
7. Monitor the Exchange Rates and Country Risk:
Fluctuating exchange rates can be a great cause of tension. Before venturing into the market you should closely monitor the variations in the exchange rates in order to understand the economy. Also certain governments impose stricter policies for the foreign companies and this could affect the profit margin of the company.
To summarize, in order to make your foreign expansion a success careful planning as well as implementation is very important. Hence, before venturing into the foreign market you should do proper analysis of your company, about the target market and the rules of the foreign country. Through proper strategic planning it is possible to achieve your goal and expand your business.