There are times when expanding your business to international markets is the best way to increase its market share and increase profits. However, there are many steps that you need to take before you can follow through on those expansion plans. If not done properly, what should be a crowning achievement for your business could be its downfall.
Make Sure You Have Proper Permissions
In many jurisdictions, there are permits that you must possess or other paperwork that you have to fill out to operate legally. If you do not have that paperwork in order, your company could be fined, temporarily shut down or forced to leave the country indefinitely. Ideally, you will have your corporate lawyer learn more about these rules and how you can comply with them.
Can Your People Live There Legally?
It will be hard to run your business if you don’t have the ability to live there legally. The same is true for your employees. While some of the things that your business does may be done remotely, this is not always the case. Typically, you will need to secure citizenship or a permanent resident status in the nation where you want to expand. From there, you may need to obtain work visas for your employees. Conversely, it may be possible to hire local workers who have permission to work in that country legally.
Where Will You Operate?
If you run a brick-and-mortar operation, you will need to determine the specific markets in which you will operate. If you build or make products, it will be necessary to find space for your factories and other relevant infrastructure. This may require getting zoning permits and other local approval on top of whatever paperwork was needed from the federal government.
Consider the Foreign Exchange Rates
The nation where you choose to expand to may not have the same currency as your home country. It may also be worth significantly more or less than your home currency depending on where you are moving from and to. While there are pros and cons to both weak and strong currencies, it will be important to know the market conditions to make an educated decision as to where the expansion takes place.
What Is the Cost of Doing Business?
If you want to make money fast, it will be important to control your labor costs. Most companies expand overseas because labor is cheaper or because they face lower tax rates. However, this could be negated if a local government is corrupt or otherwise makes it harder for someone from your country to do business. When it comes to expanding your company, you want to make sure that you don’t put yourself or your people in harm’s way just to increase your profit margins.
Expanding your company can be an effective way of growing your business in a responsible manner. The key is to learn as much as possible about this market’s culture, regulatory atmosphere and other factors that could impact your organization. Through careful deliberation and research, the odds are better that your expansion will be a success.