Tips for expanding your business overseas
Have you done your research?The next step is to conduct research. There are so many levels of research needed to maximise your potential for success. You will need to do market research in the new market to help you understand uncertainties, such as whether there would be a demand for your products, to understand whether there are already competitors with similar products existing in the market.
Have you done the necessary planning?One major factor in successfully moving your business overseas is whether you can financially support the venture. As with most business decisions you should be working out exactly how much everything is going to cost. When you are budgeting for overseas expansion you will have to consider costs that you haven’t had to deal with previously. Not only the overhead costs of setup in the new country, but you will also need to conduct research to understand how much employees will need to be paid and what the laws are around job termination.
The cost of customs and import tariffs can also be extremely high and will need to be factored in. Currency fluctuations can also be unpredictable and can significantly affect your ability to do business. Seeking help from a currency exchange specialist such as OFX will help you with your expansion overseas.
OFX provides several risk management solutions for currency fluctuations. Offering a range of different solutions including forward contracts, limit orders and FX options. These options will help to provide you with some protection against market volatility as you expand your business
What's your best method for entering the market?Look within your business and look to see what employees you have, and what systems you have that will adapt to the international market and what you may need to change.
Once a business owner starts to understand where they will be expanding overseas and the market they are entering, the next key step is to consider what’s needed for the business to effectively transition into the new market.
They will need to look at their current employee base. Are there individuals with experience taking a business abroad, or with experience in the area you are entering? It is often useful to hire a local expert to assist you with your transition and help with understanding local work practices and culture.
In saying this, sometimes it may make more sense to form partnerships or alliances with local businesses. Finding a solid partner can be a huge benefit to navigating the market and the necessary supply chains you may need to alter once you arrive. It will also help you with brand recognition as a good partner will already be recognisable in the market.
Critical success factorMaintain focus on your original value proposition and don’t try and do everything at once. You need to ensure you nail your fundamentals and don’t abandon your domestic business. There are many companies out there, like OFX, who have experience and can help you with the process of expanding internationally.
IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.