International expansion is the next logical step for companies that have maintained a stable period of profitability in their own markets. Yet, this doesn’t mean that just because you have done great in one place, these results will follow you wherever you go. You still need to put in the time to do the appropriate research and explore all possibilities before taking the plunge.
Here are three of the most important things you should have on your list.
Taking Care of Legalities
When it comes to divorce, spousal support, prenuptial agreements, domestic partnerships, child custody, and other issues related to the building or dissolution of families, the best thing to do is contact a family law expert. A qualified attorney will not only guide you through the many intricacies that each of these processes entails but also give you advice on how to proceed based on your best interests.
The same rings true for businesses aiming to expand their operations overseas. No matter how successful your enterprise is, how savvy you are as a CEO or company owner, or how much experience you have in the industry, chances are you know very little about the legalities involved in opening a branch in another country.
As such, you should do enough research on these matters so that you can avoid unnecessary mistakes from taking place and ensure the transitional period is as smooth as it can be. Examples include choosing the right business entity to set up your firm, understanding local and state laws, and meeting all legal requirements.
Understanding the Local Culture
All cultures are different, regardless of how similar the people may look or how close to each other two countries might be. Even if America borders Canada and both nations share English as their native language, there are plenty of distinctions pertaining to food, clothing, work styles, and personal beliefs. Even two regions within the same country will more than likely vary in many ways.
From a business perspective, it is essential that you not only understand this but are also willing to accept and embrace it. Otherwise, it would serve you best to stay where you are at present and focus on domestic expansion.
For instance, let us look at the concept of customer service. While a stable, wealthy country like Japan is a great market for your company to penetrate, it is also challenging to do it successfully. The reason is that the Japanese are a high-context culture where body language, mood, atmosphere, and many other factors influence decisions, most of which are done very slowly. On the other hand, Americans or Germans will probably speak to you straight and give you a definite yes or no.
Flexibility in Your Business Model
A business model is often defined as the thinking behind how an organization creates, delivers, and captures value in a specific industry. For example, an electronics multi-national giant like Apple or Samsung manufactures phones, TVs, computers, and other products in a factory. They then deliver them to retail stores all across the globe where, in most cases, they are sold to individual customers like you and me.
Pretty simple, isn’t it? At first glance, the answer is yes. There is nothing complicated about this. Yet, if we look in more detail, we can recognize other important factors like packaging, delivery schedules, manufacturing capabilities, profit rates, taxes, retail and wholesale prices, and many others. As you can see, it gets pretty complicated very fast.
But it’s not an impossible proposition. If you have been running your own business for a while, you are probably an expert already and know how to deal with these things.
Still, it is in your best interest that you remain flexible when going overseas. You might not even have to change. But if you do, you’ll be more than ready, and your business will have a higher chance of success.
If you are thinking about expanding your firm overseas, three of the most important factors to consider are the differences in business legalities between countries. The way culture affects not only consumer behavior but also possible partnerships and the various approaches that exist in terms of how firms do business and remain profitable. Others include doing your due diligence, working with local partners, and having the skills and foresight to choose the right time for international growth.
By taking a proactive, investigative approach that takes into account all the existing information and focuses on the specific details of your country of choice, you will have done an extensive amount of legwork that will maximize your chances of prosperity even before you set foot in your next business destination.