Interested in Expanding Your Business to Other Countries? 4 Steps to Follow

International expansion opens up a world of possibilities to your company, literally. From manufacturing and pricing advantages to deeper talent pools, opportunities abound for businesses with an international presence. However, the expansion process is nuanced and requires a strategy that balances your goals with regulatory requirements. Before you commit to going global, follow these steps to ensure it’s the right move.

Brush Up on Legal and Regulatory Requirements

If legal matters already represent some of the most complex parts of your business, international expansion will multiply them. Some domestic standards may be reflected internationally, but employment, data privacy, and environmental regulations deserve special attention.

There may be restrictions on emissions, additional regulatory reporting requirements, and limits on how, when, and where you operate. Research these intricacies with the support of a relocation consultant, work with the country’s local consulate, and collaborate with relevant government agencies. In many cases, economic development offices strive to bring in international employers, so leverage the resources provided.

Familiarize yourself with employment customs and requirements, which will need special care. Your standard human resources practices may not mesh with international expectations, so consider working with an expert in international hiring.

A professional employer organization can handle HR-related tasks, helping you manage payroll and benefits administration for your increased headcount. However, a PEO does not take on any compliance responsibility, so an employer of record is a good alternative. An EOR serves as the official employer of your foreign workers, handles HR matters, and is responsible for ensuring regulatory compliance.

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Assess Local Technology and Infrastructure Capabilities

The U.S. enjoys widespread technology capabilities, something that isn’t guaranteed in the rest of the world. Ascertain the infrastructure capacity of your potential international locations through standard research, scouting trips, and speaking with industry peers.

A bustling metropolis may be attractive to potential employees, but the traffic-laden streets may cause delays that obliterate shipping efficiencies. An open plat of land may present a low-cost area to build your warehouse, but without utilities, your investment cost skyrockets.

Assess the essentials your expansion requires and the potential cost of adding them yourself. Work with your finance team to determine whether these costs can be amortized, which can make the initial investment palatable. Investigate whether there are local incentives — perhaps tied to hiring targets or investment amounts — for companies expanding into the area. If applicable, negotiate a deal with local officials that will enable your expansion to be as financially advantageous as possible for everyone involved.

In some cases, your expansion may spark new investment in an area, and the locality may cover certain costs. This arrangement can be a win for both sides. Your expansion carries a smaller price tag, while acting as an investment catalyst enhances your company’s reputation in the community and among potential employees.

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Identify Location-Based Advantages

Take a global look at your domestic operation, where you’re selling products, and where they’re being manufactured. Work with your logistics team to outline shipping trends, especially in a post-pandemic climate. Customer shipping expectations may drive orders, and ensuring you have the infrastructure to support market-standard delivery schedules makes location choice critical.

Map out potential manufacturing and supply advantages, which may help you reduce production time and delivery. If you’re building precision machinery, for example, it may present a cost-saving opportunity to be closer to raw materials. By reducing shipping time and cost, you can increase your margins.

Identify local suppliers and logistics partners that you otherwise may not have explored. You may gain an advantage by utilizing rail transport, which many countries use instead of over-the-road trucks. With a comprehensive view of local infrastructure, you can choose the most advantageous location.

Learn About Local Culture, Customs, and Commonalities

Some countries may seem similar to the one your company currently calls home, but cultural norms vary widely. In European countries whose size is more similar to a U.S. state, mere miles represent significant divides.

Read up on traditional cultural norms and expectations as well as those more rooted in pop culture. In some countries, the hometown team’s football match is essentially a holiday. In others, work hours and habits will be unfamiliar to an American company.

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Immerse yourself in the local culture and observe the natural workweek cadence of your potential location. Connect with people who can guide you through a day-in-the-life, so you can better integrate with the locals. This can help inform how you recruit new employees, market your product, and conduct your business in the new area.

Document what you’ve learned and share the intel with your management team. This can help ensure that both your job postings and marketing materials resonate with this new audience.

Achieving Your Business Goals With an International Presence

Embark on your journey toward international expansion with a clear set of goals and a solid risk assessment. Navigating the international space requires a strategy uniquely its own, but ensure it is an extension of your core goals. Establish key performance indicators for your expansion efforts and report them alongside domestic metrics.

Be flexible as needs and conditions change, working with your board and management team to make sound decisions. Expand your monitoring practices to include global media, social sentiment, and customer feedback. With an international presence, your organization can respond to demand, hire strategically, and perform nimbly in a changing global landscape.

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