Global expansion is an exciting concept for a growing business. It’s an opportunity to increase your profits, connect with new customers, and strengthen your position against competitors. However, the further you expand, the more challenges you’re likely to face too.
Financial issues are common. 58% of UK businesses say they struggle with hiring staff overseas, and many companies find it difficult to judge exactly what customers want in new markets, which can lead to problems with revenue growth.
Fortunately, there are steps you can take to prepare yourself for a more successful global expansion. Here are just five tips you can consider to bolster your business as you grow overseas.
1. Start with a Business Plan
One of the most important things any business can do to prepare themselves financially for global expansion, is have the right plan. Creating a comprehensive strategy for your expansion will allow you to do crucial “due diligence” research, and determine how you’re going to ensure profitability.
Your business plan should include:
- Market segmentation analysis: Prepare a market segmentation analysis to determine who your audience is in your new market, and whether there’s potential for profit. Evaluating your customers will give you a good idea how to market your products, and price them properly.
- Competitor analysis: From a pricing perspective, it’s also a good idea to take a close look at your competitors. Consider what you can offer compared to other companies, and how this might influence your price choices.
- Goals: Defining short-term, long-term, and mid-term goals will help you to track your progress in your new market, and ensure you’re generating the right ROI for continued expansion. Make sure you have metrics to track (like conversion rates)
2. Assess the Costs of Expansion in Advance
To survive financially during a global expansion, you need to know exactly what kind of expenses you’re going to be dealing with. Conducting operations overseas comes with a variety of costs to think about, from new office and retail spaces, to travel, customers, manufacturing, and shipping.
Costs vary widely from country to country, and you may find it helpful to work with professionals from other regions to assist you in understanding the full costs. Remember, the fees associated with expansion might also include costs links to getting your product and business ready for a new market.
You might need to change the packaging of your products to adhere to different government regulations, or create new marketing campaigns in different languages. You might have to initiate new testing and quality assurance reviews based on local standards, or develop new policies and procedures based on the workflows in different countries.
Think about initiating patent and trademark reviews in your new location too. Taking a great idea to a new country could leave you vulnerable to your business being “copied”.
3. Use a Global Payroll Company
Managing payroll is one of the biggest challenges many companies face when expanding overseas. Different countries have different requirements when it comes to taxes, paid time off, and countless other factors. Working with a global payroll company will save you a lot of headaches.
The best solution will be an end-to-end global worker management and payroll solution. This will include contractor management, EoR, and global payroll. A good vendor will help you to understand the costs of managing your global workforce, and provide you with in-depth reports to help you with tracking your cashflow.
Expert payroll companies, will give you access to comprehensive local partners through a global network of vetted, in-country specialists. These can help with everything from automating processes to workforce management. You can update all of your payroll data at the click of a button, set up calendar monitoring and more. There are now a number of SaaS companies offering global payroll solutions, and you can see how they compare in this table.
4. Choose the Right Talent Strategy
In a global market, your talent pool is international, which means you have a fantastic opportunity to find professionals with all the skills your company needs. If you have the right payroll system in place, you can also minimize some of the stresses involved with paying your team.
While hiring talent in another country can be exciting, it also opens the door to a number of complex considerations, like whether it’s better to hire contractors and freelancers, or full and part-time professionals to work with you in your company.
Having a good hiring strategy will ensure you get the best possible skill sets for your team, without additional expense. It’s often a good idea to create a “beach-head team”, which includes people from your existing workforce and new local professionals, so you can hit the ground running.
5. Prepare your Go-To-Market Strategy
Finally, take the time to ensure your go-to-market strategy is perfect before you enter any new environment. A little research into your chosen market will give you a good idea of what kind of sales model will generate the best return, such as direct, indirect, distributor, or hybrid.
Decide whether you’re going to need to create a new brand for the marketplace of your choice, or whether you can continue to use the parent brand, and think about how you’re going to promote your business. Building on your existing presence, and repurposing some of your marketing strategies for external audiences can be a good way to save money.
Remember, you’ll also need to consider:
- Partners and fulfillment: How are you going to source the most affordable supplies for your business, and ensure orders are fulfilled correctly?
- Legal readiness: Make sure you have all the right licenses in place before you jump into a new space, to reduce your risk of litigation issues.
- Update your pricing model: Different locations will have different expectations when it comes to pricing.
Get Ready to Grow!
A global expansion can be equal parts daunting and exciting. The key to success from both a financial perspective, and a business perspective, is the right planning. With the tips above, you’ll have more of the information and direction you need to make your new expansion a success.
Remember, the right tools, partnerships, and business plans will save you a lot of headaches in the future, as well as significant cash.