When a good business plan pays off at home, it’s natural to want to take the show on the road. Introducing your small business to an international market has the potential to pay off in a big way, especially when it opens the door for your company to expand and grow like never before, not to mention the opportunity for higher sales in a new market.
Of course, new territory means new challenges. Most people do their homework before they visit a country, so you can imagine how much research is involved when deciding to take a company global. Are you prepared?
Ask the Right Questions
The early planning stages of expanding your business internationally should always involve asking yourself a few key questions about what’s in store. For example, do you know how familiar your target market is with your service or product? If the answer is no, you need to be ready to spend money on consumer education. However, if what you’re bringing over is an entirely new concept, your company’s name could become synonymous with that good or service, putting your business at a huge advantage.
Also, consider your consumers’ culture. Does your product or service have a place? Many Indian states still ban the slaughter of cows, for example, so it probably wouldn’t be wise to set up a burger joint in those places. Research the market thoroughly to ensure that what you’re selling can be easily embraced.
While we’re on the subject of culture, it’s important to remember that business practices can vary greatly abroad. Many American companies find themselves struggling to the point of failure just because they neglected to familiarize themselves with common business customs. Even the success of pitching your good or service to potential investors could hinge on correctly adapting it to their culture.
There are a couple of ways to avoid a cultural faux pas. Of course, it’s imperative that you do your research. Make an effort to get familiar with their body language, which is not universal. Employ the help of a reliable interpreter who can clue you in on important customs. Finally, never underestimate the power of small talk. Get to know your new associates before getting down to business.
Prepare to Spend Big
You’ve heard that you have to spend money in order to make money, but that old adage is never more important than when it applies to doing international business. Marketing costs, consumer education, salaries, user acquisitions, and legal fees are just a handful of the expenses that you will immediately meet, and you will have no choice but to deal with them.
The best way to contend with these and any other surprise costs is to set a spending limit that you cannot exceed before your launch. It’s not uncommon for these kinds of expenses to be even higher overseas than here at home, so plan for that. Operating within your budget means you have something to work with while your business finds its footing, something you’ll no doubt appreciate when the time comes.
Study Tax Laws and Banking Customs
You probably know that operating your business in a foreign country means paying taxes there. But did you know that your worldwide income is also taxable in the U.S.? It’s possible to lower those taxes, but it requires a lot of work to qualify. Banking can also be very different in some countries. It’s often not as simple as having an account and letting your bank do the rest. While your bank may be able to help with international money transfers, it may be costly to depend on it to handle all your currency conversions.
Expanding your small business to operate on the international scale is no small feat, but there are endless benefits to enjoy should you succeed. Though you will no doubt encounter a fair share of obstacles, some big and some small, arming yourself with a few key bits of information can help ensure the success of your expansion.
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