International expansion can prove to be a lucrative move for a business. Businesses can tap into new markets, build their brands, save money, and essentially generate more revenue. This, however, can only become a reality with hard work and dedication. Before stepping into international waters, it is vital that business owners have a clear picture of what is required along with a plan on how to operate. This process starts with educating yourself. Below you’ll find a list of factors that need to be considered when expanding your business internationally.
Do you presently have the capital or investments to fund an international expansion? Expansions often come with a ton of associated costs. You’ll need more employees, supplies and equipment, a commercial property, a marketing budget, and much more. Assess the costs of expanding your business and compare it to your finances. If you don’t have enough, it is best to wait and save or find suitable options for funding your business.
Rules and Regulations
You can’t simply make a decision to start a business in Mexico, find a commercial property, set up shop, and begin selling your products and services. Every foreign government has its own set of requirements for businesses that must be complied with to operate. Review the legal considerations and tax laws to ensure that you’re prepared to comply. If you’d like to test the waters of starting a business in another country, you might look for shelter companies in Mexico which can make getting past the red tape a lot easier.
What works in the US may not be as effective in another country. No business owner wants to make the mistake of expanding to a region where their products aren’t going to sell. That’s why it is important to do some research to get a clear understanding of the market they’re entering. For starters, is there a market for your products or services? Another factor to consider is the current competition. Are there already established businesses with similar products/services? Are they succeeding or failing? Are your prices competitive enough to beat out the competition while still covering your operational costs?
How much do you really know about the country you’re expanding into? Not knowing the lay of the land and the people that reside there could decrease your opportunity for success. Knowing things about the community’s cultural beliefs, values, native languages, traditions, and lifestyles essentially help you to make decisions on product/service selection, pricing, branding, and customer service will help you to best customize your business to meet the need of your target audience.
Production and Distribution
Whether you plan on manufacturing your products in the United States or look for options in the country of your choosing, it is imperative to reevaluate your production and distribution processes. Is your current process scalable so that you can increase output? If not, what changes need to be made? For those interested in manufacturing their products internationally, you’ll want to look at the available service providers in the area to determine which works best with your projected sales and growth.
Company Oversight and Management
A business cannot be successful without a proper and efficient chain of command. This is especially true when operating from two different countries. Before expanding your business internationally, be sure to consider who will oversee and manage the daily operations outside of the country. Will you relocate and manage it yourself? Do you intend to send a team of employees to work internationally? Or, are you considering the idea of hiring a local project manager to serve as management? Each of these options will require an effective plan to execute.
Expanding your business internationally is certainly a sign of success. If that is to remain true, however, it is vital that business owners do their due diligence in educating themselves on factors like those listed above and devising a plan to operate accordingly. Though the road ahead may have its ups and downs, with a solid plan in place businesses can overcome challenges and accomplish their goals.