Do you run a small business that you’d like to take global? Most small business owners primarily focus on growing their businesses at home. However, they forget that majority of the world’s consumers are found outside the country. If you don’t expand your business outside the U.S., you could be missing out.
Expansion might seem exciting and fun but it also requires a lot of planning and strategizing. You need to conduct ample research before launching a new office in a foreign country.
If you’re considering expanding your business overseas, these six essential international business tips will guide you.
Conduct Some Market Research
Conducting market research is an essential step in the expansion process. It helps you determine if your products are needed in that particular region. It also enables you to understand how you can adjust and change your products to fit customers from that region.
Below are essential questions that will help you effectively conduct market research:
- Who can I trust to give me the right information about this market?
- What are the local trading barriers?
- How has the market grown in the past 3-5 years?
- Are there any new trends that could impact the demand for my products?
- Are there any cultural differences I need to be aware of?
- If yes, how can my business adjust?
- What are the proper channels of distribution?
- How has technology been adopted in the lifestyle of the people around?
Market research also includes competition. Look into how other businesses in the same industry are operating. It will help you understand what you can do differently to fit into that particular market.
When expanding your business overseas, avoid tapping into oversaturated markets. This could include cities and towns with many companies offering similar products.
Learn About the Local Culture
Culture is considered an essential aspect of running a business. However, most entrepreneurs underestimate the importance of culture during expansion.
Sadly, what is acceptable in your country may not be acceptable in another. The business practices, laws, and relationships in a foreign market may be different. Thus, you will need to learn about the locals’ way of doing things and get your business to adopt.
Most business expansions fail because business owners don’t take the time to learn the local culture.
An area’s culture also includes the local language. The language barrier is a significant problem when expanding your business overseas. Ensure you take time to learn the local language.
Alternatively, you can use a translator to communicate with your team. However, ensure you use native speakers to interact with customers.
According to statistics, only 20% of Americans can speak a second language. However, English is not the global universal language of conducting business. This means most people prefer purchasing products or services from people who speak their native language.
Cultivate Proper Technological Resources
Technology is essential in any international business expansion plan. Technology will help you collaborate and communicate better with your global partners. It will also save you time and money that you could otherwise use for traveling to conduct meetings.
Technology will also facilitate sharing of information, management of paperwork, and tracking shipments. This will help your team stay on top of other important things.
Understand the Principles of Running an International Business
Running a business away from home is quite different. You may face many challenges that you’d otherwise not face back home.
Running an international business requires you to understand the legal customs and the rules that govern the area. A small mistake may become catastrophic to your business expansion plans.
Take your time to understand international business principles. You can do this by earning a business degree majoring in international business. It will allow you to navigate the complex world of overseas business expansion.
You can also get a mentor or join government programs designed to help entrepreneurs avoid probable pitfalls during global expansions.
Start Networking
Building business relationships and networking is an essential aspect of any business. Create useful networks with Americans who have already set up shops in the target market. You can also connect with local business owners.
Networking will give you access to invaluable insight into your target market. Your contacts could also be sources of important information about:
- The local people
- Already-operating international businesses in the area
- The local culture
- Your competition
You can start by building online relationships on social media platforms. You can also attend trade shows and local networking events that attract foreigners.
Another aspect of networking is partnering with local entrepreneurs. This is advantageous to you as your partner will already be familiar with the region. However, ensure you partner with someone who shares your goals, interests, and bottom line.
Hire a Company Secretary
Before opening a company branch in certain countries such as Hong Kong, it’s mandatory to hire a company secretary. The company secretary acts as the point of contact for all administrative and legal matters within the company.
The company secretary handles:
- Processing transfers of share
- Organizing meetings such as shareholders and board meetings
- Keeping directors and shareholders registers updated
- Being an advisor to directors about corporate governance, legal matters, and compliance issues
A company secretary can also help you through the deregistration and dissolution process. They are better equipped to offer relevant support during the process.
A company secretary will also ensure that your company is deregistered and closed down in the shortest time possible. View more on company deregistration to understand all the requirements.
Are You Ready to Run an International Business?
International business extension and expansion is a huge commitment. However, it comes with numerous risks, advantages, and a lot of benefits for your company. While extension may seem exciting, it comes with a lot more work.
Getting the extension process right will ensure that your business succeeds. Following the above international business tips will increase your chances of success. For more insightful business tips, read other articles on our website.
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