An overseas business presents lots of exciting prospects — an untapped market for current products and services, a new market for old products, and a variety of potential financial strategies — but there are many more aspects to consider than the positives. Before starting or expanding your overseas business, you also have to consider other factors that could make the move harder than you imagine.
Here are four things to consider before starting or expanding your overseas business:
Do Your Homework
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Before you set up shop abroad, do your homework. Talk to the Small Business Administration and other U.S. groups that have intimate knowledge of what it is like to do business in both your chosen industry and your preferred place. Then, talk with the embassy and industrial development office for the country in which you’d like to set up or expand your business. Next, contact the local chamber of commerce there as well as any business-related civic groups in the area. Ask specific questions and take careful notes of the answers. Don’t assume your preliminary research is correct. Check and verify. Your interpretation of the law could be different that it is in practice and every place has its quirks, so know before you go. You’ll also want to research the political climate and economic situation there.
Local Culture
No matter how great your idea or how perfect your pricing, make sure you have a firm understanding of the local culture before you set up shop. More than knowing the language and the laws for doing business in that city, region, and country, you need to know the local environment. There will be differences in language usage, local standards of decorum, local traditions, and local ways of doing business that you simply cannot find out by searching online. Make sure you have a local support to help you navigate these issues, like a networking group or a local business association. You may also want to conduct your own research by talking with locals while you scout a place.
Start Small
The local business environment in your overseas expansion is bound to be unfamiliar and, if this is not your sole venture, you may not be able to keep an eye on operations the same way you would if you lived full-time in the same town. Minimize the risk of making the wrong steps by starting small. Local traditions, customer tastes, and different laws are a lot to navigate at once, so give yourself time to grow, adapt, and develop your operations abroad to suit those limits. You may also want to use an accounting software, like Sage ERP Solutions, that will let you keep your foreign accounts in compliance and give you access to the numbers where ever you are.
Have a Plan
Lastly, make sure that you have a plan for what you are going to do overseas — as well as what comes next. Are you trying to set up manufacturing or production facilities? Or, are you trying to set up retail connections abroad? Spend some time developing your plan based on your company goals as well as the homework you’ve done. Your plan may also include hiring a Partnership Representative or an International Trade Compliance Consulting firm if you are a foreign business owner that wants to expand to the US.
Starting or expanding your overseas business is an exciting venture. Just make sure you do your research first.
